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CENTRAL  EUROPE 


m  •     ■  4 


THE  NEWEST  BORZOI  BOOKS 

ASPHALT 

By  Orrick  Johns 

BACKWATER 

By  Dorothy  Richardson 

CRIMES  OF  CHARITY 
By  Konrad  Bercovici 

RUSSIA'S  MESSAGE 

By  IVilliam  English  Walling 

THE  BOOK  OF  SELF 
By  James  Oppenheim 

THE  BOOK  OF  CAMPING 
By  A.  Hyatt  Verrill 

MODERN  RUSSIAN  HISTORY 
By  Alexander  Kornilov 

THE  RUSSIAN  SCHOOL  OF  PAINTING 
By  Alexandre  Benois 

THE  JOURNAL  OF  LEO  TOLSTOI  (1895- 
1899) 

THE  SHIELD 

Edited  by  Gorky,  Andreyev  and  Sologub 

THE  AUTOBIOGRAPHY  OF  A  SUPER- 
TRAMP 
By  William  H.  Davies 
With  a  Preface  by  Bernard  Shaiv 

CENTRAL  EUROPE 

A  translation  by  Christabel  M.  Meredith 
from  the  original   German  of 

MITTEL-EUROPA 

By 

Friedrich   Naumann 

Member   of    the    Reichstag 


New  York     Alfred  A.  Knopf    Mcmxvii 


ALL    RIGHTS    RESERVED 
BY   ALFRED   A.    KNOPF 


CONTENTS 


PAGE 

I.     PARTNERSHIP  IN  THE  WAR  AND  ITS  RESULTS  I 

We  must  know  in  the  midst  of  the  war  with  what  mutual  relations 
Germany  and  Austria-Hungary  intend  to  emerge  from  it  :  Each 
of  the  two  Empires  is  too  small  by  itself  :  The  formation  of  • 
new  military  boundaries  between  unallied  States  :  The  lack  of 
programme  at  the  outbreak  of  war  :  The  test  of  Mid-Europe 
by  history.  Necessary  reflections  :  Considerations  of  foreign- 
speaking  partners  in  the  union  :  The  differences  between  the 
two  allied  Empires  :  Dissimilarities  in  the  history  of  the  countries, 
in  their  stages  of  capitalist  development  and  in  their  rhythm  of 
life  :  Currents  in  the  German  Empire  setting  against  the  Central 
European  alliance  :  Opposing  currents  in  Austria  and  Hungary  : 
The  pohtical  independence  of  the  two  Empires  can  only  be  main- 
tained by  the  union  :  Whether  or  no  Austria-Hungary  must 
separate  into  its  component  parts  ?  :  Optimism  :  Criticism 
of  the  existing  conditions  of  alliance  :  Whether  or  no  a  pro- 
gramme can  be  drawn  up  for  Mid-Europe  ?  :  A  single  nation 
of  brothers  I 

II.  OF  THE  PREVIOUS  HISTORY  OF  CENTRAL  EUROPE        35 

A  new  historical  consciousness  is  needed  for  the  formation  of  a 
union  of  Central  European  States  :  The  extinction  of  the  dis- 
putes between  Austria-Hijngary  and  Prussia  :  The  political  task  of 
historians  :  The  historians  of  Bismarck's  founding  of  the  Empire  : 
The  Central  Europe  of  the  old  German  Emperors  :  The  period 
of  the  two  disputing  Ostmarks  and  of  the  pressure  from  the  West 
on  the  German  Empire  :  The  Napoleonic  period — ^between 
East  and  West  :  The  Vienna  Congress  and  St.  Paul's  Church 
at  Frankfurt — "  Lesser  Germany  "  and  "  Greater  Germany " 
tendencies  :  Bismarck's  fight  against  Austria  :  Bismarck  as  a 
Mid- European  in  1866  :  The  deUverance  of  Central  Europe 
from  France  :  The  hberation  from  Russia  :  Bismarck  and 
Andrassy — the  Dual  Alliance  :  Bismarck's  legacy. 

III.  CREEDS  AND  NATIONALITIES  63 

Temper  on  the  journey  towards  Mid-Europe  :  The  Mid- 
European  type  has  still  to  be  formed  :  Ancient  struggles 
between  West  Rome  and  East  Rome  in  Central  Europe  :  Refor- 
mation and  Counter-Reformation  :  Prussia  as  leading  Protes- 
tant Power  and  Austria  as  Cathohc  State  :  Protestant  apprehen- 
sions :  Austro-Hungarian  Catholicism  is  not  a  pohtical  unity  : 
Church  and  School  questions  must  never  be  the  business  of  the 
union  :  The  Central  European  Jews  :  Nationality  questions  in 

xvii  b 


xviii  CONTENTS 


all  Great  States  :  The  treatment  of  national  minorities  in  the 
German  Empire  up  to  the  present  :  Prussian  Polish  policy  : 
The  German  spirit  in  the  old  Austrian  State  :  Metternich  : 
The  democracy  of  1848  :  The  awakening  of  the  masses  to  a 
share  in  politics  ;  The  vanished  energy  of  the  earlier  German- 
ising influence  :  The  peculiar  character  of  the  Magyars  : 
The  Hungarian  Nationality  Law  and  its  enforcement  : 
Roumanians  and  Southern  Slavs  :  Austrian  nationality  disputes  : 
The  Polish  question  :  The  greatest  danger  for  the  Dual  Mon- 
archy is  past. 

IV.  THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE        iii 

Historical  evolution  of  the  character  of  work  :  Capitalism  of 
the  first  and  second  stages  :  Why  do  other  nations  not  like  us  ? 
The  organised  German  type  :  English  and  German  methods  of 
work  :  Militarism  in  work  during  war  and  peace  :  The  German 
economic  creed  must  become  characteristic  of  Mid-Europe  : 
Individual  economic  output  in  Austria-Hungary  :  The  back- 
ward sections  of  the  people  :  The  difference  in  the  productivity 
of  labour  :  The  common  rhythm  of  work  to  be  striven  after  in 
Mid-Europe  :  Popular  reasons  for  opposition  to  the  systematisa- 
tion  of  work  :  What  the  Hungarians  might  make  of  their  land  !  : 
The  worker  as  economic  force  :  Apprehensions  concerning  an 
economic  union  owing  to  differences  in  the  possibilities  of  pro- 
duction :  Objections  to  be  expected  :  The  entrance  into  Mid- 
European  partnership  in  work  as  a  heartfelt  resolution  :  The 
artistic  task  for  Vienna  and  Austria  :  The  example  of  the  South 
German  union  with  North  Germany  :  The  gradual  fusion  of  the 
bonds  of  union. 

V.  JOINT  PROBLEMS  IN  WAR  ECONOMICS  146 

Share  in  the  world's  economic  system  :  Exclusion  from 
international  trade  through  the  English  war  policy — self- 
contained  commercial  state  :  Our  stores  have  saved  us  :  The  State 
Socialism  of  war  economics  :  War  finances  :  The  further 
development  of  Socialism  owing  to  the  war  :  State  syndicates 
with  workers'  guarantee  :  State  storage  system  :  The  ap- 
proaching transition  to  peace  economics  after  the  war  system  : 
The  organised  economic  State  :  Is  Austria-Hungary  one 
economic  State  or  two  ?  :  No  joint  war  economic  system 
exists  :  A  military  partnership  combined  with  economic  separa- 
tion ?  :  Association  in  syndicates  in  virtue  of  the  war-storage 
system  :  The  Austro-Hungarian  exchange  :  The  financial 
problems  after  the  war  :  The  Germans  of  the  Empire  must  only 
wish  to  help  if  they  are  called  upon. 

VI.  OUR  POSITION  IN  THE  WORLD'S  ECONOMIC  SYSTEM     179 

The  development  of  Great  States  and  world-group  economic 
areas  :  Russian,  Enghsh  and  North  American  types  of  super- 
national  government  :  The  previous  history  of  the  inter- 
national idea  :  World-group  provinces  as  preliminary  stages 
of  internationalism  ?  :  Possibilities  of  joining  with  Russia  to 
England  :  Small  and  soUtary  ?  :  Our  abihty  to  understand  her 
other  Central  European  nations  :  The  neighbouring  States  and 
their   colonies  :  The    area    of    the    economic    world-groups  : 


CONTENTS  xix 

PACK 

The  population  of  the  economic  world-groups  :-  Are  the  world- 
group  areas  statistically  comparable  ?  :  Greater  Britain  :  The 
United  States  :  Russia  :  Mid-European  possibihties  :  The  value 
of  the  world's  economic  system  for  the  smaller  folk. 

VII.  TARIFF  PROBLEMS  217 

A  customs  partnership  without  a  further  economic  part- 
nership is  not  practicable  :  The  dangers  of  a  mere  reduction 
of  tariff  for  Hungary,  Austria,  Germany  :  Why  the  customs 
partnership  is  more  discussed  than  the  other  forms  of  economic 
partnership  :  Friedrich  List  and  the  Minister  Bruck  as  the 
forerunners  of  the  customs  partnership  :  The  Prusso-German 
Customs  Union  :  Personal  confessions  about  the  tariff  question  : 
Formation  of  a  uniform  tariff  :  Imports  and  exports  between 
Germany  and  Austria-Hungary  :  Partnership  in  demand, 
supplementary  partnership,  competition  :  Tariff  rates  :  The 
opposition  of  interests  in  the  Balkan  States  :  Joint  regulation 
of  foreign  markets  :  Customs  union,  preferential  treatment, 
intermediate  duties  on  the  basis  of  a  joint  tariff  classification  : 
Storage  treaties,  syndicates'  treaties,  and  commercial  treaty  : 
Financial  results  of  the  customs  approximation. 

VIII.  CONSTITUTIONAL  PROBLEMS  251 

Who  will  undertake  the  foundation  of  Mid-Europe  ?  :  Demar- 
cation of  the  political  activities  not  touched  by  Mid-European 
centralisation  :  Mid-Europe  can  be  no  Federal  State  :  Questions 
relating  to  reUgious  creeds  and  to  languages  are  and  remain  the 
business  of  the  individual  States  :  State  treaties  as  the  foundation 
of  the  union  :  Mid-European  central  administration  for  defined 
special  activities  :  Law  as  regards  the  conclusion  of  treaties 
in  the  German  Empire  and  in  Austria-Hungary  :  The  Austro- 
Hungarian  Ausgleich  as  a  permanent  situation  :  The  separa- 
tion of  the  mihtary  and  economic  State  from  the  nationality 
States  :  The  danger  to  the  parliamentary  system  through  the 
foundation  of  Mid-Europe  ?  :  How  the  central  administration 
may  appear  in  ten  years'  time  ?  :  Military  conventions  : 
Joint  foreign  policy  :  Conclusion. 

IX.  STATISTICAL  AND  HISTORICAL  288 

X.  BIBLIOGRAPHY  ,         328 
INDEX  347 


Central  Europe 

CHAPTER  I 

PARTNERSHIP  IN  THE  WAR  AND  ITS  RESULTS 

As  I  write  this  fighting  is  going  on  in  the  East  and  in  the 
West.  I  write  of  set  purpose  in  the  midst  of  it  all,  for  it  is 
only  in  war  time  that  our  mood  enables  us  to  entertain 
broadly  transforming  thoughts  of  reconstruction.  Once  the 
war  is  over  our  everyday  spirit  will  quickly  take  possession 
of  us,  and  in  the  everyday  spirit  Mid-Europe  can  never  be 
fashioned.  Bismarck  founded  the  German  Empire  during 
and  not  after  the  war  of  1870,  and  our  statesmen  must  lay 
the  foundations  of  this  new  structure  during  this  war,  in  the 
midst  of  bloodshed  and  the  upheaval  of  the  nations.  Later 
it  might,  and  it  would,  be  too  late. 

The  subject  I  wish  to  discuss  is  the  growing  unity  of 
those  nations  which  belong  neither  to  the  Anglo-French 
western  aUiance  nor  to  the  Russian  Empire.  But  more 
particularly  my  subject  is  the  welding  together  of  the 
German  Empire  and  the  Austro-Hungarian  Dual  Monarchy, 
for  all  further  schemes  for  a  union  of  the  Central  European 
nations  depend  on  whether  or  no,  in  the  first  instance,  the 
binding  together  of  the  two  Central  Powers  themselves  is 
successful. 

When  war  broke  out  many  of  us,  myself  included,  thought 
that  an  understanding  with  France  might  stiU  come  about, 
since  there  is  no  enmity  towards  France  either  on  the 
German  or  the  Austrian  and  Hungarian  side.  Whenever  the 
French  are  willing  we  shall  be  able  to  offer  them  the  hand 


2  CENTRAL  EUROPE 

of  friendship,  but  of  course  each  additional  month  of  war 
makes  any  mutual  approach  more  difficult.  France  has 
chosen  to  Unk  her  fate  with  that  of  England  and  from 
henceforth  wiU  be  made  use  of  by  England.  She  will  no 
longer  be  willing  to  conclude  an  independent  peace  for 
herself,  and  wiU,  unfortimately,  for  the  immediate  future, 
become  a  larger  and  more  important  Portugal  at  England's 
side.  Hence,  in  what  foUows,  we  leave  the  French  outside 
the  discussion,  whilst  always  hoping  that  in  a  more  distant 
future  they  will  rank  themselves  with  Central  Europe. 

Nor  can  we  speak  of  Italy  except  with  reserve  and 
caution.  Italy,  disregarding  her  old  union  by  treaty,  has, 
it  is  true,  gone  over  into  the  camp  of  the  enemy,  yet  she 
can  hardly  by  this  act  have  determined  her  political  and 
economic  aUiances  for  all  time.  National  humours  and 
economic  interests  are  indeed  frequently  inharmonious  in 
Italy.  Economically  she  belongs  to  Central  Europe,  but 
we  recognise  that  her  Latin  nationahty  and  the  Adriatic- 
Alpine  boundary  problem  have  turned  Itahan  thought  into 
another  direction.  Now  the  armies  on  the  Isonzo  have  the 
first  word,  and  hence  we  shaU  discuss  Mid-Europe  without 
reference  to  Italy. 

Of  the  Northern  Powers,  the  Roumanians,  Bulgarians, 
Serbians  and  Greeks,  and  also  of  Holland  and  Switzerland, 
we  shall  have  something  to  say  later  on  in  our  book.  We 
shall  not  say  very  much  however,  for  it  would  be  a  mistake 
to  include  these  smaller  Central  European  States  in  our 
scheme  from  the  outset  as  fixed  quantities,  whilst  actually 
they  still  have  a  breathing  space  before  making  their 
decision.  They  wish  to  see  and  they  ought  to  see  for 
themselves  first  whether  the  nucleus  of  Mid-Europe  will 
form  itself,  whether  the  German  Empire  and  Austria- 
Hungary  will  crystallise. 

During  the  war  we  Germans,  the  Austrians  and  the 
Hungarians  stand  in  friendly  alliance  with  the  Turks.  In 
this  aUiance  the  Turks  are  fighting  in  their  own  interests. 
They  are  engaged  in  a  brave  fight  for  Ufe  for  the  remnant 
of  a  once  powerful  State,  and  for  the  political  existence  of 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS      3 

the  faith  and  being  of  Islam.  A  strange  turn  of  history 
has  brought  us  and  the  Turks  together  in  that  their  enemies 
were  our  enemies.  Their  only  hope  of  holding  their  own  was 
an  aUiance  with  us,  and  hence  also  with  the  Austrians  and 
Hungarians.  We  hail  them,  and  hope  that  in  the  future 
too  our  paths  may  Ue  together,  but  Turkey  is  not  in  the  firsts 
instance  concerned  in  the  formation  of  the  Mid-European 
nucleus.  It  is  not  in  direct  contact  with  us  geographically, 
and  is  a  country  of  a  very  different  type  both  nationally 
and  economically ;  it  is  southern,  oriental,  antiquated  and 
sparsely  populated.  In  this  case  too  the  nucleus  of  crystal- 
lisation must  first  be  in  existence  before  the  conditions  of 
accession  to  the  union  can  profitably  be  discussed. 

Thus  our  attention  must  first  be  directed  towards  that 
portion  of  Central  Europe  which  extends  from  the  North 
and  Baltic  Seas  to  the  Alps,  the  Adriatic  Sea  and  the 
southern  edge  of  the  Danubian  plain.  Take  a  map  and 
see  what  Hes  between  the  Vistula  and  the  Vosges  Mountains, 
and  what  extends  from  GaHcia  to  Lake  Constance  !  You 
must  think  of  these  stretches  of  country  as  a  unity,  as  a 
brotherhood  of  many  members,  as  a  defensive  alhance,  as  a 
single  economic  district !  All  the  traditional  separatism  of 
these  lands  must  be  so  effaced  in  the  stress  of  the  Great  War 
as  to  make  the  idea  of  union  tolerable.  This  is  the  demand 
of  the  hour,  the  task  of  these  months.  History  speaks  to 
us  of  it  in  the  thunder  of  the  guns,  but  it  rests  with  us 
whether  or  no  we  Usten. 

****** 

It  may  be  questioned  whether  our  partnership  in  this  war 
is  due  to  chance  or  to  necessity.  We  maintain  the  latter.  In 
old  days  indeed  it  was  chance  when,  or  if  ever,  Austria  and 
Prussia  combined.  They  united  when  they  had  some 
common  task  to  complete  such  as  the  division  of  Poland  or 
the  conquest  of  Napoleon,  but  they  fell  apart  again  as  soon 
as  they  had  settled  their  own  frontiers,  or  were  attracted  in 
diverse  directions  by  other  Powers.  In  the  long  years  of 
the  past  there  was  much  more  fighting  than  harmony  in 
Central   Europe.     Each   section   went   its   own   way,   and 


4  CENTRAL  EUROPE 

there  were  as  yet  no  constraining  reasons  for  a  lasting 
unity.  The  States  were  merely  territorial  divisions,  disput- 
ing sovereignties,  and  in  no  sense  historically  determinate 
poHtical  groups.  They  grew  and  fell  apart  Uke  clouds. 
Even  the  partnership  in  the  old  German  Empire  involved 
no  solidarity,  for  hardly  ever,  if  at  all,  during  the  later 
centuries  did  this  ancient  Empire  emerge  as  a  complete 
political  entity.  It  was  broken  in  the  Thirty  Years  War, 
it  crumbled  in  pieces  in  the  Seven  Years  War,  it  split  in 
Napoleonic  times  and  it  was  divided  in  the  Civil  War  of 
1866.  We  shall  discuss  the  earlier  history  more  in  detail 
later  on.  For  the  present  this  statement  is  suihcient :  there 
is  more  unity  to-day  than  ever  before  in  the  old  German 
Empire  !  To-day  all  the  ancient  States,  large  and  small, 
in  the  stretch  of  country  described  above,  have  become  a 
single  united  fighting  entity,  and  victory  and  defeat  are  a 
like  experience  for  all,  from  Heligoland  to  Orsova.  This  is 
no  mere  political  intrigue,  no  patched-up  defensive  aUiance. 
The  war  has  come  as  a  creator  of  the  Mid-European  soul, 
which  is  now  coming  into  existence  in  advance  of  the  ex- 
ternal forms  appropriate  to  it.  It  is  this  soul  that  we  shall 
discuss,  and  its  external  embodiment  that  we  shall  examine. 
AU  the  allies  in  the  Great  War  feel  without  argument  that 
neither  now  nor  in  the  future  can  small  or  even  moderate- 
sized  Powers  play  any  large  part  in  the  world.  Our  concep- 
tions of  size  have  entirely  changed.  Only  very  big  States 
have  any  significance  on  their  own  account,  all  the  smaller 
ones  must  live  by  utilising  the  quarrels  of  the  great,  or  must 
obtain  leave  if  they  wish  to  do  anything  unusual.  Sove- 
reignty, that  is  freedom  to  make  decisions  of  wide  historical 
importance,  is  now  concentrated  at  a  very  few  places  on  the 
globe.  The  day  is  still  distant  when  there  shall  be  "  one 
fold  and  one  shepherd,"  but  the  days  are  past  when  shep- 
herds without  number,  lesser  or  greater,  drove  their  flocks 
unrestrained  over  the  pastures  of  Europe.  The  spirit  of 
large-scale  industry  and  of  super-national  organisation  has 
seized  politics.  People  think,  as  Cecil  Rhodes  once  expressed 
it,  "  in  Continents."     The  country  which  desires  to  be  small 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS      5 

and  isolated  will,  in  spite  of  this,  become  of  its  own  accord 
dependent  on  the  varying  fortunes  of  the  Great  Powers.  This 
is  in  conformity  with  an  age  of  intercommunication  and 
with  centraHsed  military  technique.  The  country  without 
alliances  is  isolated,  and  the  isolated  country  is  endangered. 
In  this  age  of  extending  State  federations  and  Great  Powers, 
Prussia  is  too  smaU,  and  Germany  too  small,  and  Austria 
too  small,  and  Hungary  too  smaU.  No  single  States  of  this 
kind  can  survive  a  world  war.  Suppose  that  we  of  the 
German  Empire  were  fighting  alone,  or  that  Austria- 
Hungary  had  to  offer  a  soUtary  defence.  Such  things  are 
no  longer  possible.  Their  day  is  past.  Hence  to-day  the 
Central  European  union  is  no  chance  but  a  necessity. 
People  who  do  not  feel  enthusiastic  about  it  must  yet 
desire  it,  since  the  alternatives  are  even  worse.  The 
intelligent  man  is  he  who  does  of  his  own  free  will  what  he 
recognises  as  necessary. 

****** 

Nevertheless  it  will  be  very  difficult  to  found  Mid-Europe, 
and  no  one  act  or  decision  can  be  at  all  adequate  to  the 
task.  It  will  occupy  at  least  a  generation.  But  for  the 
moment  it  is  for  the  Governments  and  the  peoples  to  deter- 
mine and  say  whether  or  no  they  desire  Mid-Europe  at  all 
or  not.  For  the  representatives  of  the  German  Empire, 
equally  with  those  of  Austria  and  Hungary,  will  enter 
upon  the  coming  peace  negotiations  in  an  entirely  different 
spirit  according  to  whether  or  no  they  mean  to  remain 
united  in  the  future. 

We  have  no  intention  of  saying  anything  about  the 
actual  terms  of  peace,  partly  because  at  present  pubUcity 
is  still  forbidden,  partly  because  we  ourselves  think  it  a 
useless  and  doubtful  policy  to  discuss  something  which  is 
as  yet  subject  to  military  successes  or  failures.  But  whether 
or  no  the  frontiers  of  the  two  Central  Empires  of  Mid-Europe 
be  shifted  somewhat  more  to  the  east  or  west  as  the  result 
of  military  victories,  this  question  will  arise  :  Will  the 
ambassadors  from  BerUn,  Vienna  and  Budapest  enter  the 
hall  of  the  International  Peace  Congress  as  declared  and 


6  CENTRAL  EUROPE 

honest  friends,  or  as  secret  opponents  ?  We  want  them  to 
return  to  their  countrymen  with  the  watchword  :  United 
for  ever  !  Then  they  will  indeed  bring  back  something  real 
for  every  one,  a  new  creative  work,  a  great  hope,  the 
beginning  of  a  fresh  epoch.  Thus  only  shall  we  Central 
European  nations  appear  finally  justified  for  having  shed 
our  blood  for  one  another.  What  was  Serajewo  to  us 
Germans  of  the  Empire  ?  What  were  we  seeking  in  the 
Carpathian  passes  ?  Why  did  the  Hungarians  or  the 
Southern  Slavs  trouble  themselves  about  Zeebriigge  ?  Why 
should  German  Bohemians  or  Tzechs  have  defended  the 
ridge  of  the  Vosges  ?  The  entire  history  of  the  war  with 
all  its  sufferings  and  heroic  deeds  becomes  purposeless, 
meaningless,  if  the  war  ends  with  a  misunderstanding 
between  those  who,  throughout  it,  have  been  allied.  But 
this  misunderstanding  is  not  so  far  off  as  many  think,  for 
even  now  the  spirit  of  a  unified  Mid-Europe  is  no  mere 
matter  of  course,  and  the  approaching  peace  negotiations 
wiU  supply  to  the  full  opportunities  both  small  and  great 
for  friction  and  trouble.  All  coaHtion  wars  have,  from  of 
old,  had  difficult  peace  negotiations,  for  they  end  in 
gains  and  losses  which  must  be  equalised  amongst  the 
aUies.  But  each  allied  Power  can,  and  will,  allow  and 
make  over  advantages  to  its  allies  with  a  better  grace, 
if  it  knows  that  they  are  certainly  going  to  remain  its 
allies.  Both  Powers  will  obtain  much  more  from  the 
Peace  Congress  if  they  negotiate  throughout  in  common 
and  do  not  enter  into  special  settlements.  These  con- 
siderations ought  to  suffice,  and  will  indeed  be  amply 
sufficient  for  those  who  remember  the  depressing  history  of 
the  Vienna  Congress  in  1815.  Then  exactly  that  happened 
which  now  we  must  avoid.  Temptations  to  break  faith 
will  creep  in  on  both  sides,  since  the  future  is  assured  to 
our  opponents  if  they  can  succeed  in  dividing  us.  This 
weighs  with  them  more  than  any  other  gain  from  the  war. 
But  for  what  then  have  we  sacrificed  our  sons,  and  for 
what  are  we  Germans,  Austrians  and  Hungarians  mutilated. 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS      7 

It  is  occasionally  said  that  the  war  will  lead  to  a  general 
slackening  of  the  bonds  between  the  Great  Powers,  and 
that  every  country  must  wish  to  emerge  free  and  without 
obligations  from  this  great  tragedy  of  political  aUiances. 
There  may  be  some  truth  in  this  in  so  far  as  the  constraint 
of  the  State  syndicates  has  been  generally  felt  as  such,  but 
all  the  same,  the  outcome  will  be  much  what  it  is  in  the 
case  of  industrial  syndicates  :  new  ones  are  continually 
growing  up  when  once  the  idea  of  combination  has  taken 
root.  It  is  contrary  to  history  to  beUeve  that  in  these  days 
five  or  eight  Great  Powers  will  leave  the  precincts  of  the 
Peace  Congress  without  having  some  fresh  treaties  in  their 
pockets.  What  is  called  "  freedom  "  is  nothing  but  the 
already  conceived  desire  to  change  one's  aUiance  in  the 
future. 

It  is  not  to  be  supposed  that  at  the  conclusion  of  the  war 
the  long  jubilee  years  of  an  everlasting  peace  wiU  begin  ! 
It  is  true,  doubtless,  that  there  will  be  a  widespread  inclina- 
tion towards  peace,  for  war  sacrifices  and  war  taxes  speak 
an  insistent  language.  Moreover,  we  shaU  be  more  careful 
than  hitherto  to  suppress  frivolous  pretexts  for  war  and  to 
strive  for  understanding  between  nations.  But,  on  the 
other  hand,  the  war  wiU  leave  behind  it  an  immense  number 
of  unsolved  problems,  both  new  and  old,  and  will  lead  to 
disillusionments  which  wiU  express  themselves  in  extensive 
armaments.  All  the  War  Ministers,  General  Staffs  and 
Admiralties  will  ponder  over  the  lessons  of  the  past  war, 
technical  skill  will  contrive  yet  newer  weapons,  frontier 
fortifications  will  be  made  stiU  wider  and,  above  all,  longer. 
Is  it  really  credible  that  in  such  an  atmosphere  the  isolated 
State  can  remain  any  longer  in  isolation  ? 

As  far  as  Germany  and  Austria-Hungary  are  concerned, 
they  must  either  intrench  their  respective  frontiers  on  the 
ridges  of  the  Erzgebirge,  the  Riesengebirge  and  the  Bohmer- 
wald,  or  they  must  regard  this  line  as,  in  essentials,  only  an 
inner  administrative  boundary  in  a  territory  looked  upon 
by  foreigners  as  one.  This  reasoning  is  as  valid  for  Vienna 
as  for  Berlin.     After  the  experiences  of  the  present  war  no 


8  CENTRAL  EUROPE 

isolated  country  can  remain  unintrenched.  For  the  primary 
and  most  important  military  inference  from  the  war  is  that 
in  future  we  shall  fight  only  in  long  lines,  and  that  the 
trench  will  become  the  essential  form  of  defence  for  a 
country.  The  poUcy  of  trenches  means  that  every  country 
must  consider  what  frontiers  can  and  what  cannot  be 
defended  by  trenches.  The  argument  is  somewhat  as 
follows  :  if  France  before  1914  had  not  appUed  its  expendi- 
ture on  defences  to  the  erection  of  heavy  fortresses,  but 
instead  had  protected  its  whole  frontier  from  Belfort  to 
Dunkirk  with  trenches,  probably  the  German  thrust  into 
Northern  France  across  Belgium  would  not  have  been 
possible.  The  same  thing  appUes  to  our  frontiers  in  East 
Prussia  and  to  those  in  Austrian  Galicia.  After  the  war, 
frontier  trenches  will  be  made  ever5rwhere  where  there  is 
any  possibility  of  fighting.  There  will  be  a  fresh  system  of 
Roman  and  Chinese  walls  made  out  of  earth  and  barbed 
wire. 

In  consequence  of  this  trench-making  pohcy  a  country 
will  be  constrained  to  make  certain,  at  the  moment  of 
planning  out  these  miUtary  defences,  with  whom  it  proposes 
under  all  circumstances  to  Uve  at  peace.  Europe  will  have 
two  long  ditches  from  north  to  south,  one  anyhow  stretching 
from  the  Lower  Rhine  to  the  Alps,  the  other  from  Courland 
to  either  the  right  or  left  of  Roumania.  This  will  constitute 
the  main  and  unavoidable  triple  division  of  the  Continent. 
The  problem  for  Central  Europe  to  decide  is  whether  or  no 
another  intermediate  ditch,  dividing  Germany  and  Austria- 
Hungary,  will  be  needed  in  between  the  two  great  north 
to  south  ditches.  It  will  be  needed  if  no  unity  of  future 
policy  can  be  guaranteed,  but  if  it  does  become  necessary 
it  will  be  harmful  and  fateful  in  the  highest  degree  to  both 
parties. 

The  future  trench-making  policy  will  make  it  exceptionally 
difficult  for  small  States  to  maintain  their  independence,  for 
under  this  system  miHtary  expenses  will  decrease  as  the 
size  of  the  country  to  be  defended  increases  in  relation  to 
its  frontiers.     A  State  like  Roumania  could  hardly  afford 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS      9 

to  maintain  its  own  trench  system  on  all  sides.  This  means 
that  it  must  choose  from  the  outset  which  frontiers  it  will 
leave  open.  Higghng  over  neutrahty  will  be  rendered 
much  more  difficult  by  this  coming  trench  poUcy.  Possibly 
trench-making  will  be  the  most  effective  instrument  of 
Providence  in  making  war  into  a  delusion  by  means  of  its 
own  technique.  But  in  the  first  instance  the  long  trenches 
must  be  made  and  paid  for  and  manned.  And  when  this 
is  done  Mid-Europe  will  either  be  estabhshed,  or  she  will  be 
debarred  from  unity  in  any  future  that  can  be  foreseen. 

It  is  on  these  grounds  that  a  decision  must  be  based. 

*  «  *  *  *  *  -  ' 

During  the  war  the  responsible  leaders  of  the  combatant 
States  are  so  pressed  by  their  daily  duties  that  in  the  midst 
of  strenuous  work  they  can  hardly  find  time  for  historical 
reflections.  They  are  not  in  the  fortunate  position  of 
Bismarck  in  the  winter  of  1870-71,  who  knew  from  the 
outset  approximately  what  he  wanted,  for  this  unprece- 
dentedly  serious  war  appeared,  in  the  summer  of  1914, 
undesired  and  diplomatically  unprepared  for.  We  purposely 
avoid  entering  into  complicated  discussions  over  the  causes 
of  the  war,  the  time  for  this  wiU  come  later,  when  all  the 
documents  have  come  to  light.  This  much  may,  however, 
be  stated  with  certainty  :  the  two  Central  European  Powers 
had  no  defined  mihtary  aim  because  they  were  only  prepared 
for  defence.  The  war  was  not  undertaken  in  order  to 
secure  this  or  that  object.  Hence  it  lacks  any  intrinsic 
unity  of  purpose,  and  the  royal  and  ministerial  proclamations 
calhng  the  nations  to  arms  lack  a  definite  programme.  There 
is  no  single  watchword  for  all  the  combatants  from  Apenrade 
to  Fiume.  The  war  began  purely  as  a  war  of  defence,  and 
hence  from  the  point  of  view  of  Mid-Europe  its  ideals  are 
essentially  somewhat  vague.  This,  in  our  opinion,  is  felt 
even  more  strongly  in  Austria  and  Hungary  than  in  the 
German  Empire.  In  the  German  Empire  two  ideas  were 
always  present  in  the  minds  of  Government  and  people  : 
that  some  time  or  other  a  break  would  occur  with  the 
Tsar,  and  that  some  time  there  must  be  a  fight  with  England 


lo  CENTRAL  EUROPE 

over  the  control  of  the  sea.  The  only  regret  was  that  both 
things  came  about  together  with  an  overwhelming  rush ; 
the  war  with  France,  the  war  in  the  East  and  the  naval 
war.  Austria  and  Hungary,  however,  had  no  interest  in 
either  the  French  war  or  the  Anglo-German  naval  war,  but 
instead  they  had  serious  tension  in  the  Balkans,  among  the 
Southern  Slavs  and  in  Italy.  Thus  at  the  outset  they  were 
evidently  more  concerned  about  their  southern  frontiers 
than  about  the  risks  in  GaHcia.  It  was  only  during  the  war 
itself  that  the  nations  in  the  Danube  kingdom  became  fuUy 
conscious  of  and  impressed  by  the  Russian  danger.  The 
miUtary  objective  shifted  from  Belgrade  to  Przemysl  and 
the  Carpathians,  and  then  swung  back  again  to  Trieste  and 
extended  into  PoHsh  territory.  A  situation  arose  in  which 
the  two  parties  had  a  joint  campaign  in  the  east,  whilst,  in 
addition,  the  German  Empire  had  its  special  international 
campaigns  and  the  Austrians  and  Hungarians  their  special 
southern  campaign.  Obviously  we  were  mutually  helping 
one  another  in  this  way,  but  nevertheless  the  war  was 
regarded,  and  is  stUl  regarded,  rather  differently  in  Vienna 
and  Budapest  than  in  BerUn.  There  was  no  controlling 
idea  of  joint  statesmanship  and  hke  responsibihty  in  aU 
directions.  This  controlling  idea,  however,  appeared  during 
the  war  in  peoples  and  Governments,  in  spite  of  many 
individual  differences  of  opinion.  Then  for  the  first  time 
the  beUef  took  root  in  the  hearts  of  those  concerned  that 
this  war  is  not  merely  a  German  war,  and  not  merely  a 
Danube  war,  but  is  the  historical  test  of  Mid-Europe.  But 
this  inspiring  thought  has  not  yet  risen  to  general  conscious- 
ness. It  is  yet  far  from  certain  that  all  utterances  about 
the  war  are  tuned  to  this  note.  It  is  our  task  to  strengthen 
this  consciousness,  until  even  leading  men  in  their  official 
statements  speak  of  the  rapidly  growing  unity  of  Mid- 
Europe  as  a  self-evident  fact.  The  Germans  of  the  Empire 
in  their  utterances  concerning  the  war  have  not  always 
kept  in  mind  the  effect  that  an  insistence  upon  purely 
German  aims  must  have  on  their  Magyar  and  Slav  alhes. 
To  talk,  for  instance,  of  a  decisive  struggle  between  German 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    ii 

and  Slav  is  a  misconception,  very  natural  indeed,  but  a 
serious  departure  from  ideas  proper  to  the  alliance.  Phrases 
of  this  sort  necessarily  sound  very  differently  in  the  ears  of 
Tzechs,  or  Poles  or  Slovenians  than  in  ours.  If  we  expect 
a  hundred  thousand  Poles  and  other  Slavs  to  join  with  us 
in  driving  out  the  Russian  armies,  we  must  never  let  these 
aUies  of  ours  slip  out  of  our  memories.  This  involves  a 
certain  sacrifice  for  us  Germans  of  our  accustomed  national 
mode  of  thought,  but  we  are  faced  ultimately  by  a  definite 
alternative.  Either  this  is  a  German  war,  in  which  case  we 
have  no  right  to  complain  if  it  is  so  regarded  in  Prague  and 
Agram,  or  it  is  a  Central  European  war,  in  which  case  we 
ought  to,  and  must,  speak  of  it  as  such  and  act  accordingly. 

The  same  thing  appUes  to  the  preaching  of  "  the  German 
idea  in  the  world."  My  friend  Rohrbach  has  done  us  all 
a  great  service  by  becoming  the  prophet  of  this  idea  in  his 
admirable  and  widely  read  book,  and  no  patriotically 
minded  Hungarian  or  Tzech  wiU  think  evil  of  us  patriotic 
Germans  if  we  sing  and  dream  and  study  and  work  for 
Deutschland,  Deutschland  uher  alles.  We  need  this.  It  is 
our  life's  blood.  Only,  in  doing  so,  we  must  not  fail  to 
remember  that  our  non-German  partners  too  have  a  Ufe's 
blood,  and  want  to  reahse  for  what  they  are  prepared  to 
die.  In  exalting  our  nationaHty  we  ought  at  the  same 
time  to  exalt  theirs. 

Come  what  may  we  must  not  be  petty.  It  is  obvious 
that  in  a  Germany  at  war  all  our  old  heroic  traditions  must 
be  revived,  and  we  must  see  around  us  the  Prussian  King 
Friedrich  II.,  and  Bliicher,  Moltke  and  Bismarck.  We  fight 
as  Germans,  but  we  fight  with  millions  of  non-Germans, 
who  are  prepared  to  go  with  us  to  battle  and  to  death,  so 
long  as  they  have  our  respect  and  can  beUeve  that  our 
victory  will  also  be  their  victory. 

On  the  Austrian  and  Hungarian  side  too  a  like  mode  of 
thought  must  be  acquired  more  definitely  than  hitherto. 
The  feelings  of  dishke  and  irritabiUty  often  aroused  now  by 
any  strong  expression  of  German  national  feeling  must 
vanish  and  be  overcome  in  a  common  appreciation  of  the 


12  CENTRAL  EUROPE 

many-sided  strength  of  our  great  and  noble  union.  There 
are  stUl  in  the  Empire  of  the  Danube  some  easily  expHcable 
remnants  of  the  old  temper  of  1866,  which  are  but  ill-suited 
to  the  new  Mid-Europe ;  anti-Prussian  feelings  which, 
when  they  are  expressed,  are  just  as  impalatable  to  the 
Northerners  as  the  North  German  particularism,  referred  to 
above,  is  to  the  differently  constituted  South.  Occasionally 
something  appears  which  seems  Uke  envy,  a  grudging  of  the 
strength  which  yet  is  indispensable  for  us  all  as  a  body. 
To  speak  quite  frankly  :  it  sometimes  happens  that  people 
accept  help,  and  at  the  same  time  scold  those  who  help 
them.  The  finer  spirits  in  the  Danubian  Empire  have  always 
been  sensible  that  this  was  unsuitable,  but  there,  as  here, 
there  are  people  who  have  not  such  fine  feelings.  To  such 
people  on  both  sides  the  conception  of  comradeship  in  the 
joint  war  must  be  more  openly  preached  than  hitherto,  and 
the  leading  men  in  both  States  must  speak  to  their  country- 
men more  frankly  and  decisively  of  the  accompUshed  fact ; 
that  the  past  is  forgotten,  that  we  cancel  all  our  earher 
debits  and  credits,  and  from  henceforward  press  onwards 
hand  in  hand  Uke  good  and  honest  friends.  The  war 
unites. 

In  the  later  sections  of  this  book  we  shall  have  to  discuss 
more  in  detail  the  difficulties  in  the  way  of  the  union,  and 
even  here  we  must  briefly  point  out  how  different  the  two 
Empires  are,  so  that  we  may  face  the  whole  comphcated 
problem  from  the  outset, 

Austria-Hungary  is  a  unit  of  long  standing  with  strong 
disintegrating  tendencies ;  the  German  Empire  is  a  newly 
formed  unit  with  ever-increasing  centraHsation.  Over  there 
exists  a  growing  spirit  of  particularism  or  of  provinciahsm, 
a  constant  effort  to  snatch  something  from  the  hands  of  the 
central  authority  and  to  make  Maria  Theresa's  monarchy 
a  mere  legend.  With  us,  on  the  contrary,  the  creative 
energy  Hes  more  in  the  Imperial  than  in  the  State  Govern- 
ments. To  use  an  old  phrase,  Germany  develops  daily 
from    a    confederation    of    States    into    a   federal    State, 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    13 

whilst  Austria  and  Hungary  are  growing  out  of  a  single 
State  into  a  confederation  of  States,  or  rather,  into  a  union  of 
two  States,  one  of  which  is  almost  a  confederation  of  States, 
whilst  the  other  is  an  attempt  at  a  national  State,  but  of 
a  most  difficult  composition.  With  us  political  talents 
and  aspirations  are  Imperialist,  over  there  they  are 
frequently  provincial,  separatist,  or  nationaUst,  but  not 
centraUsing. 

The  German  Empire  is  founded  on  the  German  national 
ideal,  and  finds  its  justification  therein.  The  foreign-speak- 
ing portions,  and  especially  Prussian  Poles,  are  indeed  a 
difficult  problem  for  statesmanship,  but  they  are  neither 
so  numerous  nor  so  powerful  as  to  come  into  consideration 
as  partners  in  the  Government.  Austria-Hungary,  on  the 
other  hand,  has  dreaded  for  the  last  hundred  years  the 
national  spirit  of  its  peoples  as  a  decentraHsing  power. 
Hence  its  political  thought  is  more  colourless.  In  the  place 
of  a  central  nationalism  there  is  what  the  -French  term 
etatisme,  the  mere  machinery  of  government :  monarchy, 
bureaucracy,  army. 

Austria-Hungary  is  older  ;  it  had  long  been  rich  in  land 
and  honours  when  Prussia  had  stiU  to  seek  recognition  of 
its  royal  dignity  ;  it  was  one  of  the  European  Great  Powers 
before  the  North  had  any  serious  word  to  say ;  it  was  not 
so  broken  as  the  North  either  in  the  Thirty  Years  War  or 
in  Napoleon's  time ;  it  has  followed  a  prudent  course 
through  the  centuries,  and  has  many  more  traditions  to 
uphold.  The  German  Empire,  on  the  contrary,  is  the  most 
recently  founded  of  the  European  great  States,  an  intruder 
in  the  royal  company,  less  inherited  than  fought  for,  a 
child  of  the  nineteenth  century.  It  is  like  mixing  the 
eighteenth  and  nineteenth  centuries  to  think  of  working 
up  Austria  and  Prussia  into  a  single  historical  entity. 

The  German  Empire  is  more  northerly,  colder,  more  uni- 
form, more  technical.  Austria-Hungary  is  more  southerly, 
more  brightly  coloured,  more  a  natural  growth,  more 
romantic.  The  difference  noticeable  within  the  German 
Empire  between  North  and  South  Germany  is  in  a  yet 


14  CENTRAL  EUROPE 

higher  degree  the  difference  between  Germany  and  Austria- 
Hungary. 

The  German  Empire  is  more  western,  Austria  more 
eastern.  The  same  differences  which  we  know  as  marking 
the  districts  east  and  west  of  the  Elbe  occur  in  more  defined 
form  in  Central  Europe,  so  soon  as  the  country  between 
the  Theiss  and  the  Carpathians  joins  the  countries,  distant 
to  them,  on  the  Mosel  and  Lower  Rhine. 

The  greater  part  of  Germany  is  Protestant,  most  of 
Austria-Hungary  is  Catholic. 

Germany  is  much  more  capitaUst,  and  consequently  much 
more  socialist,  than  Austria-Hungary.  For  us  Germans  of 
the  Empire  a  union  means  a  reopening  of  the  already  half- 
settled  disputes  of  the  preceding  generation  ;  for  Austria- 
Hungary  it  means  a  rapid  transition  to  conditions  and  prob- 
lems which  are  there  only  slowly  and  gently  approaching. 

The  rhythm  of  Kfe  is  different.  We  work  more  methodi- 
cally. We  think  more  in  terms  of  money,  are  more  punctual, 
more  businesslike,  hence  also  poorer  in  homely  comfort  and 
the  art  of  simple  living.  This  is  carried  so  far  that  each 
country  secretly  regards  the  other  with  something  of  pity 
and  forbearance,  because  each  lacks  just  what  the  other 
regards  as  essential  to  civiUsation. 

Austria-Hungary  possesses  more  past  because  it  is  the 
older  organisation,  and  more  future  because  it  has  more 
undeveloped  land  and  labour  power.  It  has  less  present, 
because  it  has  held  itself  back  with  long  hesitation  from  the 
technical  skill  advancing  from  the  West,  and  is  not  so  rich 
in  sea-coast,  coal,  iron,  and  organising  energy. 

Germany  is  a  country  of  large  towns,  and  daily  grows 
more  so  ;  Austria,  and  still  more  Hungary,  will  for  a  long 
time  yet  be  a  country  of  forest,  arable  land,  and  pasture. 
With  us  the  factory  takes  precedence  of  the  estate  and  the 
workman's  quarter  of  the  country  village  ;  there  the  rela- 
tion is  reversed,  as  it  was  with  us  a  good  forty  years  ago. 

BerUn  and  Vienna,  two  different  temperatures,  more 
different  even  than  Vienna  and  Budapest ! 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    15 

The  amount  of  sentimental  resistance  and  the  number 
of  opposing  practical  interests  are  considerable,  hence  it 
is  not  surprising  that  the  question  of  Mid-Europe  is  ap- 
proached with  much  criticism  from  both  sides.  Here, 
truly,  is  no  case  of  love  at  first  sight.  Rather  is  there 
evasion  and  refusal,  a  shrinking  with  instinctive  fear  from 
new  and  boundless  compUcations.  Known  evils  are  better 
than  unknown.  Hence  it  is  necessary  to  go  more  closely 
into  the  reasons  for  the  foundation  of  Mid-Europe,  and  to 
refute  opponents  by  showing  that  there  is  no  other  possi- 
bility for  either  Empire.  We  shaU  begin  this  inquiry  from 
the  standpoint  of  the  German  Empire,  and  undertake  to 
discuss  without  reserve  all  unfavourable  arguments,  since 
only  thus  can  they  be  met. 

Bismarck's  poHcy  in  its  first  stage  separated  the  Prusso- 
German  Empire  from  Austria-Hungary  ;  in  its  second  stage 
it  established  between  the  two  Empires  the  treaty  connec- 
tion which  stiU  holds.  Taking  Bismarck's  standpoint,  then, 
a  development  and  intensification  of  the  treaty  connection 
may  be  equally  well  desired  or  rejected  according  to  whether 
we  side  more  with  the  younger  or  with  the  elder  Bismarck. 
The  younger  Bismarck,  up  to  1866,  agreed  with  the  "  Lesser 
Germany  "  *  party  and  successfully  maintained  the  "  Lesser 
Germany  "  ideal  poHcy  in  opposition  to  Austria.  This  was 
the  starting-point  of  aU  his  subsequent  immense  successes, 
successes  which  were  beneficial  both  to  us  and  to  Europe.  Is 
it  surprising,  then,  that  there  are  still  many  of  the  "  Lesser 
Germany  "  party  amongst  us,  and  especially  in  Prussia  ? 

So  far  as  I  can  see,  there  are  two  principal  forms  of 
"  Lesser  German  "  opinion  :  an  Old-Prussian  and  a  Liberal 
capitalist.  The  conservative,  despotic  Old-Prussian  at  the 
bottom  of  his  heart  regards  even  the  German  Empire  as 
a  watering  down  of  his  Friedrich's  State,  and  secretly 
distrusts  the  South  Germans,  whilst  liking  and  esteeming 
them  in  other  respects,  as  not  quite  capable  of  creating  a 

•  Kleindeutsch,  Grossdeutsch,  terms  applied  in  German  politics,  1848-66, 
to  those  who  wished  (a)  to  leave  out,  {b)  to  include,  Austria  in  the  recon- 
struction of  the  Empire. — ^Translator's  Notb. 


i6  CENTRAL  EUROPE      . 

State.  He  wants  clearly  defined  terms  of  authority,  and  this 
for  their  own  sake,  although  he  sees  quite  well  what  material 
and  military  advantages  the  extension  of  the  Imperial 
German  markets  and  authority  has  brought.  He  might, 
and  indeed  does,  also  recognise  advantages,  of  which  we  shall 
speak  later,  in  a  closer  union  with  Austria-Hungary.  But 
primarily  his  traditions  and  political  class  lead  him  to  feel 
any  kind  of  joint  government  with  Austria  and  Hungary 
as  an  infringement  of  his  personal  importance,  and  this  in 
spite  of  the  doubled  area  of  territory  to  be  jointly  governed. 
The  Prussian  noble  and  his  adherents  are  strongest  in  the 
Prussian  Landtag,  less  strong  in  the  Reichstag,  and  would 
probably  have  even  less  influence  in  any  future  Mid-European 
representative  assembly,  should  such  an  assembly  arise  out 
of  the  present  beginnings.  Since  he  has  witnessed  the 
development  of  the  German  Empire  he  has  grown  prudent 
and  inclined  to  take  to  heart  the  phrase,  principiis  obsta  ! 
To  call  these  principles  of  his  merely  selfish  is  inapt,  since 
for  him  political  ideals  and  his  personal  interests  are  so 
intermingled  that  it  is  unjust  on  historical  grounds  to  deny 
his  ideal  aims.  Devotion  to  his  country  makes  him  instinc- 
tively suspicious  of  all  extensions  that  change  the  character 
of  the  State. 

His  political  opponent,  the  Liberal  capitalist,  is  of  quite 
a  different  character.  For  him  everything  centres  round 
the  undisturbed  development  of  industry  and  commerce, 
because  he  regards  these  as  the  means  to  national  prosperity 
and  a  financially  powerful  State.  The  economic  union  with 
Austria-Hungary  appears  to  him  as  a  drag  on  progress,  a 
leaden  weight  on  the  foot.  Partnership  with  Austria- 
Hungary  wiU  probably  mean  that  the  German  Empire 
must  live  through  again  the  last  thirty  years  of  its  domestic 
policy,  and  there  is  no  security  that  the  second  experience 
will  be  as  fortunate  as  the  first.  It  might  be  that  we  should 
remain  involved  in  an  agrarian  economic  policy  against 
which  hitherto  we  have  fought  with  good  reason.  Economic 
union  with  Austria-Hungary  signifies  prolongation  of  the 
policy  of  protection,  strengthening  of  middle-class  efforts, 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    17 

difficulties  in  the  way  of  joining  in  English  international 
commerce,  and  a  drag  on  modern  enterprise.  The  Liberal 
capitaUst,  of  course,  knows  well  that  the  Mid-European  union 
wiU,  on  the  other  hand,  bring  advantages  to  him  also,  since 
it  will  widen  the  market  protected  by  tariff  and  will  increase 
considerably  the  possible  openings  for  his  capital.  As  a 
Liberal  he  fears  that  an  undemocratic  spirit  may  be  intro- 
duced by  Austria,  and  more  especially  by  Hungary,  for 
Austria-Hungary  has,  it  is  true,  many  Parhaments,  but  all 
the  same  there  is  little  effective  ParUamentary  spirit  in 
Austria,  and  in  Hungary,  with  a  rigorously  worked  out 
Parliamentary  system,  there  is  Uttle  of  universal  democracy. 

With  these  two  "  Lesser  Germany  "  types  is  associated  a 
third,  "  Greater  Germany,"  *  party,  which  for  national 
reasons  seeks  the  closest  sympathy  and  union  with  the 
Germans  in  Austria  and  Hungary,  but  wishes  to  admit  no 
foreign-speaking  section  into  the  German  State,  since  it 
already  finds  our  Poles,  Danes  and  French  a  heavy  burden. 
Certain  members  of  this  group,  for  reasons  based  on  the 
principle  of  German  nationality,  are  indeed  counting  even  to- 
day on  the  approaching  break-up  of  the  Danubian  Monarchy, 
and  would  gladly  bring  about  a  purely  German  State 
extending  from  the  North  Sea  to  Trieste,  "  the  German 
port."  This,  at  least  up  to  the  outbreak  of  war,  represented 
the  opinion  of  many  Pan-Germans,  whilst  others  among 
them  always  accepted  the  Danubian  State  as  a  given  existing 
whole,  and  reckoned  with  it  as  such. 

Obviously  in  actual  Ufe  very  varied  combinations  and 
gradations  of  these  three  modes  of  thought  are  met  with. 
Any  one  who  regards  Mid-Europe  as  something  to  aim  at, 
must  come  to  an  understanding  with  them.  So  far  as  this 
understanding  is  economic,  or  concerns  domestic  politics,  we 
shall  defer  it  to  later  sections,  but  here  we  shall  speak  of 
what  is  common  to  all  three,  of  the  desire  to  maintain 
German  power.  We  believe  that  they  will  all  recognise  at 
bottom  that  this  power  is  in  itself  more  important  than 
either  the  maintenance  intact  of  the  Old-Prussian  despotism, 

*  See  Translator's  Note  on  page  15. 

B 


i8  CENTRAL  EUROPE 

or  the  rapid  development  of  industrial  capitalism,  or  the 
setting  up  of  the  purely  national  State.  By  them  and  by 
us  all  it  is  accepted  that  the  Fatherland  is  worth  more  than 
any  individual  interests  however  well  founded.  The  ques- 
tion is  then,  whether  the  German  Empire  can  face  the  future 
confidently  without  an  aUiance  with  Austria-Hungary, 
whether  it  is  perhaps  even  true  that  we  are  stronger  without 
Austria-Hungary  than  with  it  ?     It  is  this  that  we  deny. 

We  have  already  said  elsewhere  that  the  German  Empire 
is  too  small  by  itself  to  defy  permanently  future  general 
attacks.  This  statement  is  an  undeniable  inference  from  this 
war  up  to  the  present,  and  needs  no  further  support,  for  if 
we  suppose  that  Austria-Hungary  were  merely  neutral,  then 
we  should  have  to  face  all  the  Russian  army  corps  alone  ; 
but  if  we  picture  Austria-Hungary  as  one  of  the  crowd  of 
our  enemies,  then  the  position  of  Germany  becomes  a 
miUtary  impossibility.  Hence  the  German  Empire,  for  its 
part,  can  only  give  up  the  idea  of  a  strong  and  binding 
alliance  with  Austria-Hungary  if  another  equally  safe  and 
equally  natural  alliance  can  take  its  place.  This  is,  however, 
difficult  to  imagine  after  all  that  has  happened  in  the  war. 
An  aUiance  with  France,  as  we  have  already  said,  would 
be  very  advantageous  both  to  us  and  to  the  French,  but 
what  French  Government  could  conclude  it  now  ?  An 
alliance  with  England  is  still  theoretically  conceivable,  not- 
withstanding the  mutual  "  songs  of  hate,"  but  who  would 
vouch  for  its  permanence  ?  And  how  much  would  even  a 
friendly  England  help  us  in  the  face  of  a  second  Seven  Years 
War  on  the  Continent  ?  An  alliance  with  Russia  offers  less 
security  for  the  Empire,  and  is  less  in  accordance  with 
national  sentiment  than  union  with  Austria-Hungary,  and 
its  permanence  could  only  be  attained  at  the  expense  of 
a  joint  partition  of  Austria-Hungary.  It  must  not  be  for- 
gotten that  according  to  Bismarck's  Gedanken  und  Erinner- 
ungen  the  traditional  understanding  between  Russia  and 
Prussia  was  broken  off  from  1876  onwards,  because  Bismarck, 
with  the  approval  of  the  whole  of  Germany,  was  prepared 
to  offer  our  Uves  to  protect  the  position  of  Austria-Hungary 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    19 

as  a  Great  Power !  This  was  the  decision  upon  which  the 
present  war  depends ;  this  was  the  poKcy,  at  the  height  of 
his  creative  work,  of  that  master  whom  we  ought  aU  to 
endeavour  to  follow.  The  die  was  cast  then  in  favour  of 
Mid-Europe. 

Think  for  a  moment,  please,  whether  it  would  be  endurable 
if  our  Secretary  of  State  for  Foreign  Affairs  returned  from 
the  Peace  Congress  with  the  news  that  we  were  again  in  the 
same  position  as  before  1876 ;  that  is,  faced  by  the  choice 
between  Russia  and  Austria !  We  should  all  know  what 
that  must  signify :  the  future  sacrifice  of  the  Danubian 
Monarchy !  This  is  where  the  '*  Lesser  Germany  "  ideal  leads 
us  if  it  is  logically  carried  out.  Of  course  this  final  result 
would  not  be  openly  spoken  of  at  the  outset,  but  in  Austria 
and  Hungary  a  slackening  of  our  friendship  would  at  once 
be  understood  in  this  sense,  and  another  alliance  would 
instantly  be  sought  at  whatever  cost.  The  international 
situation  is  such  that  no  half  security  wiU  serve  Austria- 
Hungary.  There  a  firm  footing  is  essential.  Moreover,  the 
Germany  which  deserts  its  comrade  after  such  a  stupendous 
war  would  later  on  be  betrayed  in  its  turn  by  its  fresh 
partner !  This  is  of  aU  things  the  most  certain.  We  shall 
discuss  later  on  the  economic  aspects  of  association  with 
Russia  or  England. 

****** 

Strong  opposition  to  Mid-Europe  is  also  to  be  expected 
on  the  part  of  Austria  and  Hungary,  and  so  far  as  I  can  see 
in  the  following  five  typical  forms  : 

The  Imperial  privy  councillor,  weU  proved  in  the  service 
of  the  Crown,  has  contributed  largely  to  the  maintenance  of 
government  in  that  country  of  complicated  race  problems 
without  always  meeting  with  the  recognition  he  deserved. 
But  he  has  grown  up  in  such  intimacy  with  the  idea  of  the 
ancient  Austrian  dignity,  and  so  full  of  dislike  for  Prussian 
forms  and  inf ormaUties,  that  he  will  admit  Prussia  as  httle  as 
possible  into  his  sphere  of  activity.  That  North  German 
embodiment  of  unrest  would  do  more  harm  than  good  in 
ancient  Austria,  where  delicate  handling  is  required ;    and 


20  CENTRAL  EUROPE 

he  simply  does  not  believe  that  the  Prussians  would  ever 
allow  him  to  have  any  say  in  the  matter.  He  regards  the 
Prussian  system  as  a  strange  machine,  whose  efficiency  is 
not  to  be  denied,  but  whose  noise  and  mechanical  accuracy 
make  him  shudder.  He  himself  prefers  to  go  on  with  good 
hand-work  in  the  old  style  ;  even  if  it  wastes  time  it  is  at 
any  rate  more  human. 

The  Austrian,  and  also  the  Hungarian  Slavs  (Tzechs, 
Poles,  Ruthenians,  Slovaks,  Slovenians,  Dalmatians),  as  well 
as  the  Hungarian  Roumanians,  do  not  as  a  matter  of  course 
expect  very  much  benefit  from  any  fraternisation  with 
the  German  Empire.  For  the  most  part  they  keep  up  a 
continual  quarrel  with  the  Germans  Uving  in  their  com- 
munal and  provincial  districts ;  consequently  they  look 
on  them  as  their  domestic  enemies  and  are  accustomed  to 
judge  the  whole  of  Germany  by  them.  Fortunately  they 
like  the  Russians  even  less,  as  a  rule,  than  the  Germans, 
and  they  are  glad  to  remain  Austrian,  only  they  deplore 
that  arrangement  of  the  universe  which  compels  them  to 
live  between  two  great  bodies  of  people  who  are  so  alien 
to  them.  They  will  endeavour  in  various  ways  to  take  the 
opportunity  of  the  foundation  of  Mid-Europe  in  order  to 
secure  special  national  advantages  for  themselves,  since,  as 
born  particularists,  they  are  only  interested  in  a  minor  degree 
in  its  formation  ;  their  first  thought  is  for  their  special 
nationaUty. 

The  Magyar  Hungarians  are  in  a  very  different  position. 
Their  authority  depends  on  the  defeat  and  restraint  of  the 
Russians,  for  it  is  evident  that  one  of  the  first  principles  of 
a  conquering  Russia  would  be  to  humihate  the  Magyars 
for  the  benefit  of  the  Hungarian  Slavs,  and  perhaps  even 
of  the  Roumanians.  The  Magyar  State  can  only  continue 
to  exist,  in  its  present  form,  as  an  independent  poUtical  factor, 
in  alliance  with  one  of  the  non-Slav  Great  Powers.  This 
is  what  binds  the  Magyars  of  almost  every  shade  of  opinion 
so  firmly  to  the  German  Empire.  They  are  well  aware  that 
Austria  alone  cannot  protect  them  from  the  Russians.  So 
far  then  as  a  German-Hungarian  friendship  is  concerned  we 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    21 

and  the  Magyars  agree  perfectly,  but  when  it  is  a  question 
of  the  Mid-European  constitution,  which  wiU  sooner  or 
later  become  necessary,  it  appears  that  the  existing  relations 
between  Hungary  and  Austria  are  far  too  vague  to  admit 
of  a  new  Mid-European  adjustment  being  based  without 
difficulty  on  the  Austro-Hungarian  Ausgleich.  And  since 
the  Magyar  is  by  nature  and  tradition  a  stickler  for  "  State 
rights,"  and  often  more  of  a  theorist  than  an  opportunist, 
he  may,  even  with  the  best  intentions,  prove  a  seriouf 
obstacle  at  some  given  later  time.  Since  we  must  discuss 
these  matters  more  in  detail  in  another  place,  it  will  suffice 
here  to  direct  attention  to  them. 

The  Austrian  German,  perhaps  also  the  German  in  Hun- 
gary, and  more  particularly  the  German  in  Siebenburgen,  is 
naturally  eager  to  obtain  any  sort  of  pohtical  unity  with  the 
German  Empire.  But  in  many  cases  he  asks  for  something 
rather  different  from  what  we  Germans  of  the  Empire  could 
grant  him.  Hundreds  of  times  the  Germans  of  the  Ostmark, 
left  outside  Bismarck's  Empire,  have  caUed  to  us  :  "  Come 
over  and  help  us  !  "  Equally  often  they  have  been  answered  : 
"  It  will  not  do,  you  owe  your  poUticcd  allegiance  to  Austria 
or  to  Himgary  and  we  must  not  interfere  !  "  With  us  in 
the  German  Empire,  thanks  to  Bismarck's  training.  State 
policy  comes  before  the  pohcy  of  any  natlonahty,  hence  we 
do  and  have  done  nothing  which  could  seem  like  incitement 
to  a  German  Irredenta.  Italians,  Serbs,  Roumanians,  or 
Russians  from  one  side  of  the  frontier  are  continually  calling 
to  and  tempting  their  race-fellows  on  the  other.  But  we, 
respecting  the  connection  made  by  the  alliance,  have  often 
been  obhged  to  let  our  brothers  caU  in  vain.  This  has 
produced  a  definite  feeling  of  annoyance  ;  to  what  purpose 
is  my  Fatherland  so  powerful,  if  it  cannot  stretch  out  a 
helping  hand  to  me  across  the  border  ?  The  Germans  in 
Austria  have,  in  a  difficult  situation,  done  much  for  the 
German  race  and  for  the  Austrian  State,  for  which  they 
receive  no  tangible  reward  from  either  side.  Even  now, 
in  the  Great  War,  they  supply  comparatively  the  largest 
number  of  soldiers  in  Austria  ;    suffer,  as  they  tell  us,  the 


22  CENTRAL  EUROPE 

most  severe  losses ;  subscribe  relatively  the  most  to  the 
Austrian  war  loans ;  and  yet  are  not  certain  for  a  single 
day  that,  after  the  war,  when  the  ParUamentary  majority 
becomes  effective  again,  they  will  not  be  excluded  from  a 
share  in  the  government  and,  in  spite  of  this,  have  to  bear 
the  greater  part  of  the  cost  of  restoring  Galicia.  In  this 
state  of  abandonment  they  once  more  stretch  out  their 
hands  to  the  German  Empire  to  demand  that  no  fresh  treaty 
be  made  with  Austria  which  does  not  afford  them  guarantees 
against  poUtical  exclusion  and  oppression.  From  their 
point  of  view  they  are  not  unjustified,  but  it  is  by  no  means 
certain  whether  the  German  Empire  is  in  a  position  to  delay 
its  new  Central  European  treaty  of  aUiance  until  the  very 
necessary  regulations  for  the  nationalities  within  Austria 
and  Hungary  are  completed.  And  if  they  are  completed, 
the  question  will  stiU  be  a  domestic  affair  for  Austria  and 
Hungary.  The  German  Empire  might  indeed  discuss  it  in 
a  friendly  manner,  but  certainly  must  not  come  forward 
from  outside  like  a  dictator,  lest  the  whole  movement  for 
unity,  so  essential  for  aU,  be  endangered  from  the  outset. 
I  know  that  one  section  of  our  German  brothers  in  Austria 
were  in  such  a  position  before  the  war  that  they  woiild  then 
rather  have  given  up  Austria  for  lost  and  have  preferred 
to  be  included  in  the  German  Empire.  But  I  beUeve  that 
during  the  war  insight  into  the  coherence  and  responsi- 
bility demanded  by  all  the  evidence  of  history  has  so 
developed  among  these  very  Germans  that  they  will  now 
reahse  in  future,  better  than  before,  that  it  is  a  national 
necessity  for  Germany  to  continue  Bismarck's  pohcy  of 
1876  and  1879  of  maintaining  the  integrity  of  Austria. 

Moreover,  in  many  cases  the  racial  impulse  towards  the 
German  Fatherland  is  oddly  counteracted  by  the  Austrian 
interests  of  the  German  industrials.  Of  course  there  are 
a  great  many  non-German  industrials,  but  nevertheless  the 
Germans  form  such  an  important  and  outstanding  group 
among  the  rest  that  they  must  be  counted  here  as  a  separate 
type.  As  a  rule  the  German  producer,  as  a  man  and  a 
German,  desires  the  closest  possible  union  with  his  great 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    23 

and  beloved  home  country,  but  as  a  man  of  business  he 
occasionally  remarks  :  "  God  protect  me  from  my  friends  !  " 
This  feeUng  is  very  different  in  different  branches  of  industry. 
Often  the  competition  of  the  German  Empire  constitutes 
the  greatest  danger  for  Austro-German  industry,  or  is  at 
least  so  regarded.  We  shall  go  into  details  later,  here 
we  only  wish  not  to  overlook  the  tendency  altogether. 
Non-German  industrials,  too,  may  be  possessed  by  a  Uke 
anxiety. 

Of  the  relation  of  the  Crown  and  of  the  supreme  command 
of  the  Army  to  the  Mid-European  scheme  we  shall  purposely 
avoid  speaking  here,  because  this  is  beyond  the  range  of 
our  knowledge,  and  discussion  might  perhaps  do  more  harm 
than  good. 

Of  such  a  mixed,  if  not  more  mixed,  nature  is  the  recep- 
tion given  to  the  concept  of  a  Central  European  union  in 
Austria  and  Hungary.  But  here,  too,  the  ultimately  decisive 
consideration  will  not  be  what  advantage  or  disadvantage 
this  or  that  group  hopes  or  fears,  but  whether  or  no  it  is 
desired  to  maintain  the  Dual  Monarchy  as  a  State.  Whoever 
desires  this  must  also  desire  the  Central  European  aUiance, 
because  an  Austria-Hungary  without  allies  would  be  even 
more  wholly  lost  than  a  German  Empire  without  allies ; 
and  because  no  other  aUiance  in  the  world  can  give  the 
Dual  Monarchy  the  necessary  support. 

We  have  before  mentioned  it  as  theoretically  possible 
that,  in  the  case  of  a  weakening  of  Bismarck's  aUiance, 
which  Graf  Andrassy  concluded  for  Austria-Hungary  in  1879 
with  the  assent  of  his  Imperial  master,  the  Danube  Empire, 
remembering  the  Seven  Years  War,  might  some  time  range 
itself  with  Russia  and  France.  In  fact,  we  admit  that  there 
are  individuals  in  Vienna,  or  in  the  Slav  districts,  who  do 
occasionally  think  something  of  this  sort.  This  is  the  only 
effective  threat  which  Austrian  statesmen  have  available 
for  us,  for  a  bare  alUance  between  Austria-Hungary  and 
England  would  be  just  as  platonic  as  a  war  waged  by  the 
Dual  Monarchy  alone  against  England.  It  is  conceivable 
that  a  Franco-Austro-Russian  union  against  the  German 


24  CENTRAL  EUROPE 

Empire  might  be  a  serious  danger,  and,  in  fact,  almost 
must  be  so.  It  is  questionable,  indeed,  whether  the  Austro- 
Hungarian  Crown  could  rely  on  either  its  people  or  its 
troops  for  a  new  Seven  Years  War  of  this  kind,  but  we  are 
wilUng  to  admit  this,  with  some  important  reservations, 
for  the  sake  of  theoretical  accuracy.  What  would  Austria- 
Hungary  gain  thereby  in  the  end  ?  Even  in  case  of  victory 
she  would  be  reduced  to  the  level  of  a  crumbling  Balkan 
State  dependent  on  Russia's  goodwill,  crumbling  because 
the  Slavs  would  be  puUing  with  all  their  might  towards 
Russia,  and  the  Germans  towards  Germany,  An  Austria 
which  adopted  this  course  would  have  lost  its  eastern 
frontier,  its  future  in  the  south,  and  its  task  in  the  world's 
history,  and  therewith  its  inner  unifpng  force.  Such  a 
poUcy  might  be  contemplated  in  case  of  need  for  psycho- 
logical reasons,  but  not  from  poHtical  considerations.  And 
since  the  old  Austro-Hungarian  Monarchy  possesses  a  wealth 
of  political  feeling  such  as  exists  practically  nowhere  else 
in  the  world,  we  may  safely  reckon  that  if  a  choice  has  to 
be  made  it  will  be  founded  not  on  temporary  humours,  but 
on  more  fundamental  laws  of  development,  which  means 
that  the  Central  European  alliance  will  be,  in  fact,  supported 
and  maintained  notwithstanding  all  the  poUtico-legal  and 
other  difficulties  connected  with  it. 

Many  readers  may  think  it  scarcely  fitting  for  us  to  discuss 
at  all  such  grievous  and  dismal  possibilities.  But  in  a 
political  discussion  of  this  kind  all  imaginable  cases  ought 
to  be  reckoned  with,  because  it  must  always  be  presumed 
that  each  such  case  is  being  taken  into  account  somewhere 
or  other.  Such  investigations  do  not  make  cheerful  read- 
ing, but  it  is  not  our  business  to  make  an  inspiring  appeal, 
but  rather  to  discuss  in  a  manner  inteUigible  to  doubters 
and  opponents.  Before  two  Empires  bind  themselves  for 
better  or  for  worse  they  must  have  a  thorough  preHminary 
stock-taking.  Austria-Hungary  is  as  independent  as  the 
German  Empire,  has  absolute  freedom  of  action,  and  has 
the  moral  right  to  make  any  use  of  this  freedom  which 
offers  permanence  and  prosperity  to  the  Danubian  Empire, 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    25 

even  if  it  is  displeasing  to  the  North  German  Empire. 
Austria  is  concerned  with  Austrian  policy,  and  Hungary 
with  Hungarian  poHcy.  We  do  not  dispute  the  formal 
right  to  adopt  the  position  of  opponent,  we  only  assert  that 
a  dissolution  of  the  permanent  aUiance  by  Austria-Hungary 
would  and  must  be  a  kind  of  suicide.  From  the  Austro- 
Hungarian  standpoint  the  alhance  with  Germany  is  less 
a  sentimental  obhgation  than  a  pressing  necessity  for  self- 
preservation. 

*  if  *  *  *  * 

But  we  have  not  yet  got  to  the  bottom  of  the  matter. 
One  final  and  most  difficult  question  still  remains  to  be 
examined  :  Whether  the  Danubian  Monarchy  can  be  kept 
in  existence  at  all  with  or  without  an  alliance  ?  This  ques- 
tion is  actually  discussed  both  within  and  without  the  black 
and  yellow  boundaries,  and  we  must  not  overlook  it,  because 
there  are  serious  German  pohticians  who  will  hear  nothing 
of  the  Central  European  union,  for  no  reason  but  that  they 
consider  a  spht  in  the  hitherto  federated  Dual  Monarchy 
to  be  historically  unavoidable,  and  because  there  were  or 
are  serious  German-Austrians,  and  also  members  of  other 
nations  in  Austria  and  Hungary,  who  agree  with  them. 
We,  for  our  part,  do  not  share  this  opinion.  If  we  did 
we  should  not  write  about  the  future  of  Mid-Europe.  We 
are  optimists.  But  since  pessimists  exist,  their  opinions 
also  must  be  examined. 

Pessimists  are  no  new  phenomena  in  or  out  of  Austria. 
When  Maria  Theresa,  a  queen  unsurpassed  by  the  ablest 
men,  and  founder  of  effective  home  government,  ascended 
the  throne,  the  doubters  said  that  it  was  beyond  himian 
power  to  breathe  Ufe  into  the  State.  And  from  that  time 
onwards  the  whisperings  and  mutterings  about  a  fatal 
illness  have  never  ceased,  but  the  sick  man  has  gone  on 
living  passably  well  all  the  same.  There  have  been  almost 
always  symptoms  of  disintegration,  but  always  new  signs 
of  life  too.  And  the  course  of  the  present  war  speaks  much 
for  the  possibiUties  of  hfe  in  the  Hapsburg  State  federation. 
If  we  Germans  of  the  Empire  iind  here  and  there  less  concord 


26  CENTRAL  EUROPE 

than  we  should  wish,  yet  experienced  and  reliable  Austrians 
teU  us  that  the  mobilisation,  the  conduct  of  the  war,  and  the 
administration  have  gone  on  much  better  than  they  would 
have  thought  possible.  Strife  ceased,  pettiness  disappeared, 
slackness  vanished,  a  sense  of  duty  showed  itself,  the  will 
developed,  the  State  was  at  hand. 

This  is  not  the  place  to  go  into  aU  kinds  of  details  about 
unfortunate  experiences  during  the  war  of  which  we  hear  in 
private,  if  for  no  other  reason  than  that  these  assertions 
cannot  now  be  checked.  At  the  end  of  the  war  Austria  will 
have  the  depressing  but  unavoidable  duty  of  conducting  an 
inquiry  into  loyalty  and  disloyalty  to  the  State.  Granted 
that  as  a  rule,  after  the  first  mobiUsation,  it  was  harder  to 
keep  the  army  up  to  strength  in  the  non-German  and  non- 
Magyar  districts  than  with  us,  yet  we  must  remember  all 
that  has  already  been  said  about  the  position  of  the  Slav  in 
Austria.  If  we  take  the  past  into  account  in  regard  to 
those  matters,  we  shall  say  in  spite  of  everything  :  the 
unity  of  the  State  has  proved  beyond  all  expectation ! 
What  notions  England  and  Russia  had  about  the  progress 
of  the  war  !  They  imagined  whole  nations  coming  from 
the  Danube  to  join  them.  There  has  never  been  the  sUghtest 
sign  of  this. 

The  most  severe  trial  of  the  Dual  Monarchy  is,  of  course, 
connected,  both  now  and  in  the  futiure  after  the  war,  with 
the  ideals  of  nationaUty.  Without  entering  here  upon  an 
investigation  of  the  nationaUty  question  we  can  yet  assert 
that  the  highest  tension  in  the  disputes  concerning  it  is 
now  relaxed,  and  that  the  war  is  proving  a  stem  master  and 
educator  in  moderating  the  demands  of  the  nationaUst 
particularists.  The  impossibiUty  of  sovereign  small  States 
with  mixed  populations  is  obvious.  This  does  not  mean 
that  the  different  nationaUties  wiU  forget  all  their  quarrels, 
but  they  will  regard  their  disputes  as  a  matter  of  home  and 
not  of  foreign  politics.  They  will  recognise  that  a  Tzech 
army,  or  a  Croat  General  Staff  or  a  purely  Magyar  Foreign 
Office,  or  a  Slovenian  economic  poUcy  or  a  GaHcian  State 
Bank    must    be    counted    as    impracticable.     Centralised 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    27 

Management  will  emerge  from  the  Carpathian  campaign 
heavily  burdened  yet  greatly  strengthened.  Even  the 
Hungarians,  who  during  the  war  have  occupied  prominent 
positions  in  this  Central  Management,  will  be  obUged  to 
recognise  this.  They  do  not  contemplate  abandoning  any- 
thing of  the  principle  of  Duahsm,  but  they  are  sufficiently 
keen-sighted  to  see  that  centraHsation  is  technically  unavoid- 
able for  reasons  of  pohtical  necessity.  If  the  Government 
makes  use  of  its  present  favourable  opportunity  it  will 
re-create  and  extend  what  Maria  Theresa  brought  into  being, 
pohtical  consciousness  !  Nothing  will  help  more  towards 
this  than  joint  work  at  the  new  and  important  task  of 
fashioning  Mid-Europe  :   begin  a  fresh  epoch  ! 

So  long  as  the  Austro-Hungarian  Central  Government  or 
the  responsible  representative  of  the  dynasty  has  nothing 
else  in  view  but  to  maintain  the  existing  state  of  things 
with  the  help  of  smaU  reforms,  there  wiU  be  Mttle  to  grip 
the  imagination  of  the  youth  of  all  the  nationaUties  owing 
allegiance  to  it.  But  when  once  it  raises  the  banner  of  a 
new  epoch  its  gates  will  be  thronged  by  able  men.  Austria- 
Hungary  imdoubtedly  possesses  amongst  all  its  peoples 
proportionately  numerous  talents  and  noble  and  effective 
gifts.  But  hitherto  pohtical  employment  has  offered  too 
few  tasks  demanding  a  broad  outlook,  to  attract  abihty. 
This  may  and  shall  be  different  now.  A  new  State-creating 
enthusiasm  will  be  wrung  out  by  force  and  necessity.  It 
rests  with  the  Crown  to  awaken  all  spirits  by  the  watch- 
word, Mid-Europe,  and  to  let  the  fight  for  triviahties  appear 
indeed  trivial.  It  rests  with  the  Crown  whether  there  shall 
be  Spring  or  Autumn  after  the  war.  It  is  optimistic  to 
beHeve  that  it  will  unhesitatingly  choose  Spring,  but  there 
is  surely  no  cause  to  give  up  hope. 

An  old  State  can  endure  much  provided  its  foreign 
defences  are  assured.  Turkey  offers  a  remarkable  instance 
of  this.  That  Turkey  lost  one  piece  of  territory  after  another 
was  due  to  her  old-fashioned  army  and  the  doubtful  status 
of  the  advisers  and  instructors  from  the  rival  countries. 
Now    that    the    Young    Turk   movement   is  beginning   to 


2S  CENTRAL  EUROPE 

revive  in  virtue  of  the  Pnissian  reorganisation  of  the 
army,  matters  are  rapidly  beginning  to  look  more  favour- 
able. But  Austria-Hungary  was  always  more  stable  than 
Turkey,  and  has  never  become  so  weak  from  a  military 
standpoint.  Hence  usually  the  area  of  the  State  has 
been  maintained,  even  in  the  most  difficult  times,  and 
hence,  too,  there  is  no  reason  now  to  regard  the  further 
salvation  of  the  Danubian  Monarch}^  as  improbable.  There 
is  no  natural  law  asserting  that  a  complete  cure  will  be 
attained,  but  it  may  be  attained,  and  we  desire  to  attain  it. 
We  Germans  of  the  Empire  must  desire  it. 

The  Austrians,  however,  must  not  take  it  in  bad  part 
when  I  remark  that  it  is  largely  their  own  fault  if  pessimistic 
opinions  about  their  country  are  too  widely  prevalent  in  the 
world.  There  is  a  special  sort  of  political  criticism  in  Vienna 
which  thinks  itself  interesting  and  important  when  it  paints 
gloomy  pictures.  This,  in  Vienna,  is  done  with  no  very 
serious  intention,  but  is  rather  like  the  daily  grumblings  of 
an  old  lady  who  would  not  feel  it  quite  the  thing  to  acknow- 
ledge that  she  had  eaten  and  slept  well.  This  artificial 
melancholy  is,  in  fact,  purely  aesthetic,  and  has  very  little 
to  do  with  politics,  but  foreigners  attach  a  political  meaning 
to  such  expressions  of  weariness.  If,  for  instance,  it  had 
been  rumoured  in  Paris  before  the  war  that  the  Bavarians 
were  on  the  point  of  separating  from  the  German  Empire, 
we  should  have  raised  our  glasses  and  cried,  "  Good 
luck  !  "  But  if  the  news  appeared  one  evening  in  the 
Corriere  delta  Sera  or  in  some  other  foreign  paper  that  the 
Tzechs  were  threatening  the  Austrian  State  and  had  ready 
ears  for  foreign  whispers  of  intrigue,  the  Vienna  cafes 
would  have  sighed  out,  "  Just  what  we  expected  of  those 
Tzechs  !  "  No  doubt  there  is  occasionally  reason  to  sigh, 
but  it  need  not  be  done  so  openly  or  with  such  satisfaction. 
If  Austria  herself  will  recognise  her  attacks  of  pessimism  for 
what  they  really  are,  that  is  for  aesthetic  politics,  then 
foreigners  too  will  begin  to  respect  her  as  more  healthy. 
We  have  confidence  in  you,  have  confidence  in  yourselves  ! 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    29 

The  outcome  of  our  inquiry,  so  far,  has  been  to  show  the 
necessity  for  a  close  union  of  both  Empires.  Meanwhile 
we  have  assumed  in  various  places  without  further  argument 
that  the  new  aUiance  must  be  richer  in  content  than  the 
present  one,  but  we  have  not  yet  been  able  to  explain  why 
the  existing  mutual  alliance  will  not  suffice  longer. 

The  present  Dual  Alliance,  called  for  a  time  the  Triple 
Alliance,  and  then  again  the  Dual  AUiance,  which  dates 
from  October  16,  1879,  was  a  defensive  alliance  in  the 
event  of  one  of  the  two  Central  European  Powers  being 
attacked  by  a  third  party.  How  and  when  exactly  such  a 
case  would  arise  cannot  be  gathered  from  the  text  of  the 
treaty.  Indeed,  so  far  as  I  can  understand  it,  the  event 
referred  to  in  the  treaty  has  never,  in  the  strict  sense  of  the 
text,  actually  occurred,  indeed  hardly  can  occur,  for  by  the 
time  the  fact  of  being  attacked  is,  so  to  speak,  juridically 
evident,  any  readiness  to  help  would  be  too  late.  The 
really  effective  content  of  the  Dual  AUiance  was  conse- 
quently in  part  more  and  in  part  less  than  a  treaty.  More 
in  so  far  as  mutual  goodwill  was  genuinely  ready  for  any 
sort  of  compUcation  that  might  arise.  But  less  in  that  any 
compulsion  to  recognise  the  event  referred  to  in  the  aUiance 
was  lacking.  We  have  seen  in  the  case  of  Italy,  the  treaty 
with  which  in  any  case  differed  somewhat  from  the  German- 
Austrian-Hungarian  treaty,  how  pUable  a  carefuUy  drafted 
text  becomes  in  this  respect  if  an  iU  will  undertakes  its 
interpretation.  Since  each  new  case  is  different  in  form  it 
must,  as  a  matter  of  course,  be  discussed  as  new  by  the  two 
Cabinets.  This  is  in  the  nature  of  things  so  long  as  there 
are  two  Foreign  Offices  with  different  aims,  methods  and 
leaders.  But  the  two  Foreign  Offices  must  be  retained,  as 
we  shaU  explain  more  carefuUy  later.  The  consequence  is 
that  poUtical  treaties  concerning  defensive  aUiances  cannot 
be  regarded  as  in  themselves  binding  on  a  nation. 

When,  for  example,  in  1911,  in  connection  with  the 
Agadir  demonstration,  we  were  in  danger  of  a  Franco- 
Russian  war  about  Morocco,  without  its  being  possible  for 
us  to  assert  an  actual  attack  by  the  French,  it  remained,  so 


30  CENTRAL  EUROPE 

far  as  we  knew,  an  open  question  whether  the  Austro- 
Hungarian  army  would  help  us  at  all,  since  it  was  not 
bound  to  do  so  by  the  text  of  the  treaty. 

When  in  the  summer  of  1914  the  heir  to  the  Austrian 
throne  and  his  wife  were  murdered  by  boyish  criminals  at 
Serajewo,  the  German  Empire  was  not  obliged  by  the 
clauses  in  the  treaty  to  trouble  itself  at  aU  about  the  matter. 
That  the  Emperor  Wilhelm  and  his  advisers  did  take  action 
was  in  excess  of  the  treaty  obhgation.  Germany  offered 
her  Ufe-blood  to  Austria-Hungary,  and  the  latter  thereupon 
accepted  the  enemies  of  Germany  as  her  own.  The  Great 
War  is  thus  much  more  than  a  treaty  war,  it  is  a  partnership 
of  sentiment,  as  though  we  had  akeady  grown  into  unison. 

Suppose  now  that  the  two  Empires  simply  return  to  the 
old  relation  at  the  end  of  the  Great  War ;  that  would  be 
something  less  than  what  now  exists  during  the  war.  Less 
just  because  this  brotherhood  of  blood  was  not  legally 
demanded  of  us,  and  we  all  know  this  weU  enough.  But 
how  ought  the  future  relation  to  be  put  into  words  ?  We 
have  forebodings  both  in  North  and  South  that  the  future 
will  bring  us  face  to  face  with  yet  more  difficult  matters, 
that  the  world  wiU  remain  for  us  full  of  dark  and  strange 
dangers.  How  then  can  we  mutually  safeguard  ourselves, 
lest  one  day,  for  whatever  human  reason,  the  partnership 
should  prove  non-existent  ? 

The  safeguard  certainly  does  not  consist  in  mere  pohtical 
treaties.  No  treaty  can  be  formulated  between  two 
sovereign  States  which  has  not  its  loopholes  and  omissions. 
The  safeguard  lies  in  a  community  of  hfe  in  its  many  aspects, 
pohtical,  economic  and  personal ;  in  the  voluntary,  syste- 
matic interchange  between  the  two  countries,  in  the  com- 
munity of  ideas,  of  history,  of  culture,  of  work,  of  legal 
concepts,  of  a  thousand  and  one  things  large  and  small. 
Nothing  less  than  the  attainment  of  this  common  existence 
will  bind  us  really  securely.  But  even  the  will  to  attain  it 
is  of  immense  value.  And  this  is  the  spirit  in  which  we 
proclaim  Mid-Europe  as  the  goal  of  qui-  development. 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    31 

In  trivial  matters,  and  those  of  minor  importance,  it  is 
possible  to  draw  up  and  detennine  upon  complete  plans  or 
estimates,  but  for  a  scheme  of  the  magnitude  and  difficulty 
of  this  in  regard  to  Mid-Europe,  such  a  proceeding  would  be 
most  unprofitable.  Nothing  is  easier  for  the  expert  than  to 
enumerate  ten  or  twelve  points  in  a  programme.  Something 
as  follows  : 

The  same  recruiting  laws. 

Mutual  mihtary  inspection. 

Joint  committee  for  foreign  affairs. 

Joint  boards  for  railways,  the  control  of  rivers,  etc. 

The  same  coinage  and  measures. 

The  same  laws  for  banks  and  commerce. 

The  same  assessment  for  mihtary  expenses. 

Mutual  Uabihty  for  national  debts. 

Equality  of  customs  tariffs. 

Joint  collector  of  taxes. 

The  same  factory  laws. 

The  same  laws  for  companies,  S5nidicates,  etc. 

This  sort  of  thing  might  be  continued  for  quite  a  long 
time,  but  it  is  meaningless.  In  real  Hfe  problems  come  up 
in  succession,  and  no  one  can  tell  beforehand  in  what  order 
or  in  what  selection.  Even  for  pohtical  parties  the  Ust  of 
demands  in  their  programme  is  more  often  a  source  of 
weakness  than  of  strength.  On  the  one  hand  people  are 
deterred  by  the  Hst  because  they  cannot  tolerate  one  of  the 
points  enumerated,  whilst  they  keenly  deplore  the  absence 
of  another.  On  the  other  hand  the  party  leaders  them- 
selves tie  their  hands  unnecessarily,  and  often  are  quite 
unable  to  accomphsh  what  they  have  pledged  themselves 
to.  They  desire  and  ought  to  be  judged  by  their  deeds  in 
each  case  as  it  occiurs,  and  they  ought  to  realise,  step  by 
step  according  to  their  best  judgment,  the  conmion  ideals 
and  aims  of  the  party.  This  practical  conception,  resulting 
from  party  experience,  apphes  to  a  yet  greater  extent  to 
the  State.  It  is  true  that  an  able  Minister  President  may 
be  able  to  make  one  or  two  promises  which  can  be  redeemed 


32  CENTRAL  EUROPE 

in  a  comparatively  near  future,  but  he  will  never  lavishly 
make  all  the  promises  that  he  would  carry  out  were  he  a 
Zeus.  If,  then,  a  new  and  important  political  structure 
comes  into  the  sphere  of  practical  poUtics,  a  kind  of  super- 
State  over  other  States,  an  Empire  of  Empires,  it  would  be 
a  direct  sin  against  the  ideal  of  this  new  creation  to  try  to 
stuff  it  to  overflowing  from  the  outset  with  tasks  that 
would  occupy  ten  or  twenty  years.  Each  item  on  the 
programme  given  above  will  require  years  of  work  to 
accomplish.  Many  will  be  attempted  in  vain.  Others,  to 
which  to-day  we  give  no  thought,  will  become  urgent 
to-morrow.  Politics  are  a  work  of  real  life  done  for  the 
sake  of  that  Ufe. 

It  would  be  better  to  attempt  to  indicate  from  the  outset 
those  departments  with  which  the  super-State  must  not 
interfere,  but  we  know  from  the  history  of  the  German 
Imperial  Constitution  how  elastic  the  boundary-line  between 
Empire  and  individual  State  has  remained  after  more  than 
forty  years.  We  shall  refer  in  the  chapter  on  constitutional 
problems  to  some  of  the  principles  of  division  which  are 
relevant  in  this  connection.  The  essential  thing  now  is  not 
an  academic  general  authorisation  lasting  through  one  or 
two  Hfetimes,  but  the  estabhshment  of  an  effective  starting- 
point  for  the  new  institution  itself.  We  shall  investigate 
further,  later  on,  how  this  may  be  done. 

Nor  must  it  be  thought  that  Mid-Europe  can  be  called 
into  being  merely  by  laws,  regulations  and  penalties.  It  is 
at  least  equally  important  that  the  boundary  between  the 
federated  States  shall  be  non-existent  for  all  important 
groups  of  intellectual  and  material  interests,  as  is  partly 
the  case  already  :  community  in  banks,  sjmdicates,  trade 
unions,  craftsmen's  guilds,  agricultural  conferences,  meetings 
of  economists,  historians,  lawyers,  doctors  and  many  others. 
Hitherto  such  super-State  groups  have  generally  only  ex- 
tended from  us  to  the  German- Austrians,  but  it  is  necessary 
that  a  common  atmosphere  should  prevail  throughout  Mid- 
Europe.  All  this  must  not  be  hindered  secretly  or  openly 
by  the  Government,  but  must  be  definitely  promoted,  so 


PARTNERSHIP  IN  WAR  AND  ITS  RESULTS    33 

that  a  community  of  life  may  develop  from  above  down- 
wards as  a  result  of  comradeship  in  the  alliance. 

****** 
The  cry  comes  to  us  from  the  midst  of  the  war :  "  We 
must  be  a  single  nation  of  brothers,  inseparable  in  adversity 
or  danger !  "  This  sublime  call  from  Uving  and  dying  is 
the  key-note  for  the  coming  epoch.  Not,  indeed,  that  there 
has  been  no  friction  in  the  conduct  of  the  war !  Such 
friction  has  occurred,  and  does  still  occur,  and  often  seems 
so  disturbing  to  those  most  closely  affected  that  they  have 
no  great  desire  to  let  their  neighbours  become  too  intimate. 
0£&cers  and  soldiers  of  the  German  Empire  who  have  come 
back  from  the  joint  fighting-lines  often  speak  bitterly 
against  the  Austrians  and  Hungarians,  condemning  them 
for  want  of  punctuality,  lack  of  marching  efficiency,  and 
inaccuracy.  In  these  matters  the  difficulties  of  the  polyglot 
army  are  often  much  too  Uttle  considered.  People  forget, 
too,  that  the  Austro-Hungarian  army  missed  the  schooling 
of  1870.  These  Imperial  German  mihtary  critics  do  not 
reaUse  that  the  new  portions  of  the  German  army  in  1870 
were  of  varying  values,  and  needed  first  of  all  amalgamation 
with  the  efficient  Prussian  army.  Moreover  there  are 
mutual  complaints  occasionally  in  the  German  army  itself. 
This  does  not  mean  that  any  doubt  is  felt  of  the  indomitable 
courage  of  every  section  of  the  Central  European  Army. 
Even  the  severest  critics  praise  the  genuine  and  unreserved 
devotion  of  the  Austrian  and  Hungarian  troops  in  the  face 
of  danger,  and  their  good  and  faithful  comradeship.  On 
the  other  hand,  both  Austrians  and  Hungarians  complain  of 
the  German,  and  especially  of  the  Prussian,  want  of  con- 
*sideration  and  overbearing  manners,  and  so  on.  On  both 
sides  there  has  been  some  stupidity,  and  disagreement  in 
details  has  often  gone  deep.  But  all  this  only  signifies  a 
succession  of  incidental  events.  Comradeship  in  fighting 
and  death  is  a  much  greater  thing  than  these  unpleasant 
matters,  to  which  we  only  refer  because  they  are  more 
harmful  if  unexpressed.  There  is  no  progress  without 
irictioa.    And  indeed  such  half  and  secondary  tones  are 


34  CENTRAL  EUROPE 

never  absent  from  human  endeavour.  Even  in  the  army  of 
a  single  individual  State  not  a  single  day  of  the  war  passes 
without  coUisions  between  transport  wagons,  without 
conflicting  orders,  without  omissions  and  wrong  judgments. 
Can  it  be  expected  that  two  armies  that  have  not  fought 
side  by  side  for  a  hundred  years  should  at  once  act  Hke 
Siamese  twins  ?  When  at  last  the  guns  are  silent  and  those 
who  return  home  are  at  work  once  again  in  house  and  shop, 
then  these  transitory  happenings  will  sink  into  confused 
impressions  and  ideas,  but  the  vital  wiU  endure  :  so  many 
nationaUties  faced  by  one  death  in  one  struggle  !  After  the 
war  only  our  common  victory  wiU  iUumine  us. 

And  if  once  again,  which  God  forbid,  the  storm-bell 
should  ring  for  Central  Europe,  this  war  will  form  a  memo- 
rable background ;  fathers  will  tell  their  sons  how  they 
were  carried  from  the  firing-Une  by  trusty  comrades  with 
whom  they  could  hardly  speak.  We  do  not  yet  know  how 
different  all  we  Central  Europeans  shall  have  become  after 
the  war.  We  have  experienced  the  full  weight  and  harsh- 
ness of  international  poUtics,  we  have  lost  more  brothers 
and  children  than  any  one  generation  before,  but  we  have 
also  received  more  help  from  God  and  man  than  ever  did 
heroes  of  an  earUer  time.  We  are  losing  much  of  our 
social  harshness  in  the  war,  the  class  war  for  individual 
interests  is  relaxing,  former  enemies  find  themselves  loyally 
united  heroes,  nations  who  formerly  only  looked  askance 
at  one  another  are  mutually  friendly.  It  is  our  high  fate 
to  experience  what  to  later  generations  will  seem  like  a 
sacred  legend.  With  this  war  behind  us  we  could  remove 
mountains.  Now  or  never  the  lasting  unity  between  East 
and  West  will  develop,  and  Mid-Europe  will  stand  between* 
Russia  and  the  Western  Powers, 


CHAPTER  II 

OF  THE  PREVIOUS  HISTORY  OF  CENTRAL 
EUROPE 

If  an  historical  entity  is  to  be  made  of  Mid-Europe,  a 
fresh  historical  consciousness  must  grow  up,  for  economic 
considerations,  however  serious  they  may  be,  will  not  of 
themselves  suffice  to  arouse  the  necessary  enthusiasm.  Of 
course  a  scheme  of  this  nature  cannot  be  carried  out  without 
numerous  calculations  as  to  material  advantages  and  dis- 
advantages, but  it  is  a  false  rendering  of  history  to  beUeve 
or  wish  to  believe  that  great  poUtical  transformations  can 
be  accompUshed  by  the  spirit  of  calculation  alone.  Each 
new  social  creation  has  its  birthplace  in  the  human  soul, 
and  this  soul  is  never  merely  economic  ;  from  time  imme- 
morial and  stiU  to-day,  it  is  compounded  of  impulses  and 
desires,  material  and  ideal,  definite  and  vague,  variously 
mingled  but  yet  pressing  forwards. 

A  revolution  in  thought  is  needed  comparable  to  the 
change  of  soul  which  preceded  or  followed  the  founding  of 
the  Empire  by  Bismarck ;  a  re-estimation,  not  indeed  of 
all,  but  of  many  accepted  values.  If  we  go  nowadays  into 
our  German  Reichstag  we  notice  that  it  is  only  for  certain 
minor  affairs  that  Prussians,  Bavarians,  Saxons,  Wiirttem- 
bergers,  Hessians,  Hanoverians  or  Mecklenburgers  sit 
together.  Our  poUtical  parties  have  throughout  lost  their 
provincial  character  in  relation  to  general  questions  of 
State :  they  think  Imperially !  During  the  war  this 
Imperial  consciousness  has  shown  itself  with  especially 
remarkable  power.  There  may  indeed  still  be  daily  conflicts 
of  interests  among  us  Germans,  but  there  is  no  spirit  of 
separatism.     Things   are   naturally   somewhat   different   in 

35 


36  CENTRAL  EUROPE 

the  case  of  our  foreign-speaking  fellow-citizens,  but  they  too 
hold  their  own  in  the  war  with  courage  and  endurance,  for 
the  unity  of  the  Empire.  This  complete  agreement  in 
principle  is  the  greatest  triumph  of  Bismarck's  work  as 
founder ;  for  when  the  German  Empire  was  "  constructed," 
as  people  used  to  say  in  those  days,  the  Prusso-German 
spirit  of  unity  existed  only  in  desire,  not  in  fact.  In  those 
days  the  individual  States  still  had  their  own  history,  their 
own  pride  and  their  own  sensitiveness.  Many  centuries  of 
quarrelsome  and  turbulent  individual  history  lay  behind 
them.  Often  the  triviaUties  of  their  mutual  relationships 
are  hardly  to  be  called  history.  The  Germans  were  a  non- 
poUticaUy  minded  race  of  good  fellows  and  servants, 
intellectually  active,  but  with  Httle  mind  for  the  interests 
of  the  State.  They  went  each  his  own  way,  like  sheep 
without  a  shepherd.  But  in  the  interval,  out  of  all  this 
rusticity  and  confusion  a  Prusso-German  tradition  has 
developed,  that  is,  we  have  each  saved  out  of  our  very 
chequered  pasts  something  that  we  as  Germans  can  carry 
on  with  us  as  our  joint  inheritance,  whilst  we  have  let 
much  sink  into  obUvion  of  the  old  quarrels  and  envy  and 
injustice.  Some  wounds,  indeed,  are  not  yet  quite  healed, 
as  we  see  in  the  case  of  the  Guelphs.  But  who  stiU  deplores 
nowadays  that  Prussia  deprived  the  Saxon  royal  house  of 
its  most  fertile  territories  ?  Who  nowadays  gives  a  thought 
to  the  fact  that  nearly  all  the  federated  States  took  the 
field  against  Prussia  in  early  days  and  again  in  1866  ?  Who 
now  objects  to  the  fact  that  Frankfurt-on-Main  was  annexed 
in  those  days  ?  The  whole  nation  is  conscious,  without 
putting  it  much  into  words,  that  no  progress  can  be  made 
as  an  historical  entity  without  a  cancelling  of  old  bonds. 
The  past  is  past !  Let  the  dead  bury  their  dead.  They 
have  served  their  age  as  we  wish  to  serve  ours.  Honour  to 
their  name  and  to  their  ashes  ! 

The  poUtical  spirit  of  Mid-Europe,  if  it  is  to  be  of  much 
value,  must  now  take  possession  of  us  to  the  extinction  of 
numerous  old  disagreements,  for  there  have  been  many 
harsh,  acute  and  cruel  wars  between  Austria  and  Prussia, 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   37 

and  between  Austria  and  Bavaria.  Here,  too,  the  rubbish 
of  centuries  needs  to  be  cleared  away  before  the  new  building 
can  be  put  up.  SUesia,  Bohemia  and  the  Tyrol  have 
witnessed  amazing  struggles.  We  are  not  at  present  con- 
cerned with  the  fights  with  and  about  the  Tzechs,  the 
Hungarians,  the  Poles  and  the  Serbs,  but  are  considering  in 
the  first  instance  the  battles  waged  between  the  old  German 
Austria  and  the  equally  German  Powers,  Prussia  and 
Bavaria.  Our  ancient  banners  have  all  been  carried  in 
opposition  to  one  another  throughout  the  old  German 
Imperial  territory.  We  will  leave  them  hanging  peacefully 
on  the  walls,  for  no  stalwart  regiment  is  ashamed  of  its 
earUer  bravery.  But  we  may  well  allow  some  dust  to 
gather  on  these  symbols  of  bygone  strife,  for  new  banners 
are  now  coming  to  the  front,  honourable  insignia  of  our 
indescribably  great  common  war.  Let  us  act  on  the 
principle :  to  understand  all  is  to  forgive  all.  We,  for  our 
part,  can  understand  how  the  golden  kingdom  of  Austria 
had  to  resist  the  rise  of  Prussia  with  all  its  might.  You  can 
understand  that  the  energy  existing  in  the  North  German 
States  had  to  work  out  its  course.  We  can  both  understand 
that  the  poUtics  of  the  eighteenth  century  were  the  pohtics 
of  conquering  princes,  and  that  under  the  conditions  of  the 
time  it  could  not  be  otherwise.  You  went  to  Upper  Italy 
as  conquerors  just  as  King  Friedrich  II.  went  to  Silesia.  A 
hundred  wars,  Uttle  and  big,  were  fought  out  within  the 
boundaries  of  what  is  now  Austria  so  that  it  might  become 
Austria  ;  a  hundred  fights  were  necessary  so  that  Prussian- 
Germany  might  come  into  existence.  This  was  and  is  the 
way  of  the  world.  To-day  we  can  hardly  realise  how  at 
one  time  neighbouring  towns  and  princedoms  could  con- 
template feuds  with  each  other.  Formerly  they  laid  siege 
to  one  another,  now  they  talk  and  eat  together.  Now,  too, 
the  honoured  successor  of  the  Empress  Maria  Theresa  can 
receive  the  descendant  of  King  Friedrich  II. :  we  are 
partners  in  victory  ;   your  enemy  is  our  enemy  ! 

We  must  extinguish  between  North  and  South  the  feud 
that  existed  before  Napoleon's  time,   that   showed  itself 


38  CENTRAL  EUROPE 

during  that  time  in  bitter  misunderstandings,  and  has 
since  embittered  the  common  life.  Looking  back  we  shall 
see  both  Friedrich  IL  and  Maria  Theresa  as  two  splendid 
warrior  types  of  the  same  period,  souls  in  the  same  Valhalla, 
sovereigns  inspired  by  a  Hke  spirit  of  uncompromising 
foresight.  We  shall  even  accept  Mettemich  and  Baron  von 
Stein  as  part  of  the  same  picture,  far  apart  though  they 
were  in  real  life  :  the  one  a  scientific  statesman  full  of  a 
facile,  industrious  elegance,  the  other  a  prophet  inspired  by  a 
difficult  national  moraUty.  We  of  the  German  Empire  will 
purposely  forget  the  suppression  of  the  joyous  youth  of  our 
national  movement  in  the  Conferences  of  Aachen,  Karlsbad 
and  Vienna,  we  shall  know  no  more  about  Olmiitz,  or  about 
the  pressure  on  the  Frankfurt  Federal  Diet ;  we  shall  be 
patient  when  we  think  of  the  negotiations  against  Prussia 
which  Beust  in  Vienna  carried  on  with  France,  for  all  this 
is  past  and  has  an  adequate  explanation  in  history.  In  Uke 
manner,  too,  Austria  will  forget  that  at  the  Vienna  Congress 
Prussia  was  ready  to  take  the  field  with  France  against  her, 
that  the  Customs  Union  was  directed  and  carried  on  by 
Prussia  against  Austria,  that  in  1859  Prussia  did  not  help 
Austria  against  France  and  Italy,  Both  sides  must  shelve 
the  irritations  roused  by  the  Crimean  War.  Our  common 
frontiers,  formerly  so  often  overstepped,  are  from  henceforth 
to  be  permanent  boundaries,  no  longer  frontiers  dividing 
two  foreign  Powers,  but  inland  boundaries  between  federated 
countries.  And  the  Emperor  Wilhelm  I.,  dead  a  quarter  of 
a  century  ago,  will  figure  in  the  history  of  our  Central 
European  union  as  a  brother  of  the  Austro-Hungarian 
Emperor  and  King  Franz  Joseph  I.,  who,  by  a  miracle,  still 
dwells  among  us,  to  pronounce  the  blessing  of  a  revered  and 
beloved  old  age  upon  the  new  epoch,  after  so  many  ancient 
quarrels,  an  Attinghaus  of  the  newborn  and  saving  peace  of 
nations. 

Were  Bismarck,  hero  and  centre  of  many  combats,  to 
appear  amongst  us  again  for  the  peace  negotiations  after 
the  Great  War,  not  only  would  he  be  hailed  with  infinite 
confidence  from  all  sides  and  by  every  party  in  the  German 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE  [39 

Empire,  but  all  the  peoples  in  Austria  and  Hungary  would 

meet  him  enthusiastically.     Notwithstanding  his  fight  at 

Koniggratz,  he  would  appear  to  all  of  us,  from  the  North  Sea 

to  the  Bosnian  frontier,  as  the  creator  of  Mid-Europe,  the 

man  who  dispensed  mighty  power  and  justice  throughout 

the  centre   of  the  European  continent.     Would  that  he 

were  here ! 

Hf  Hf  *  *  *  * 

Forgetfulness  is  not,  however,  enough  in  itself  to  awaken 
the  new  sentiment  for  Mid-Europe,  it  will  merely  be  a 
preparation  for  further  spiritual  progress.  We  must  learn 
to  discover  the  germs  and  tendencies,  the  prophecies  and 
strivings  of  the  future  in  the  past.  New  tasks  demand  new 
eyes.  This  is  a  very  important  chapter  and  merits  all  the 
care  and  devotion  of  young  historians,  for  historians  are 
ultimately  the  educators  of  the  people.  Their  responsibility 
increases  with  the  democratic  interest  taken  by  the  people 
in  the  State.  Cabinet  policy  in  the  old  style  could  be 
fashioned  in  case  of  need  without  historical  ideas,  by  bribery, 
calculation,  political  technique  and  intrigue.  But  since  the 
masses  have  become  influential  in  determining  the  fate  of 
the  world,  they  need  to  have  ideas  and  aims  and  meanings 
with  regard  to  future  happenings.  It  is  true  that  not 
every  one  can  read  the  writings  of  a  Treitschke  or  a  Friedjung, 
but  the  stream  of  their  knowledge  flows  through  a  hundred 
channels  of  speech,  school  and  newspaper,  to  the  cottages  of 
the  citizen  and  voter.  Hence  it  may  be  allowable  to  insert 
here  some  special  discussion  in  outUne  of  the  people  and  of 
the  nature  of  its  history. 

In  speaking  in  such  a  connection  of  the  historian  as  a 
political  educator,  I  see  on  his  right  hand  the  philosopher 
and  on  his  left  the  poet.  I  regard  him  not  merely  as  a 
seeker  into  the  memorable  events  of  the  past,  but  as  an 
exponent  of  the  discoveries  made  by  himself  and  his  feUow- 
workers.  In  the  first  instance,  indeed,  the  historian  is 
concerned  entirely  with  facts ;  he  determines  what  has 
happened.  That  is  the  absolutely  indispensable  basis  of  his 
art,  as  necessary  as  the  daily  renewed  inspiration  of  nature 


40  CENTRAL  EUROPE 

is  to  the  painter.  He  who  loses  the  discipline  of  reaUty  is 
worthless  as  an  artist.  But  when  he  has  stored  up  material 
round  him  like  the  stones  for  a  mosaic,  he  has  then  to  show 
whether  he  is  more  than  a  collector,  whether  he  has  the 
power  to  reanimate,  to  command  his  material  to  take  form 
and  hve.  He  must  breathe  something  of  himself  into  his 
material.  This  even  appHes  to  a  certain  extent  to  descrip- 
tions of  ancient  and  long-past  peoples  and  periods.  When 
Mommsen  wrote  his  Roman  History,  it  was  a  German 
history  of  the  Romans,  a  Roman  history  expressed  in 
German,  a  breathing  upon  the  stones  so  that  they  cried  out. 
This  he  was  able  to  do  because  through  his  experience  of 
the  rise  of  the  young  German  State  he  could  hve  out  the 
times  of  the  first  ancient  Empire  of  the  West.  But  the 
historian  who  portrays  our  own  ancestors,  so  that  we  can 
inherit  and  carry  on  their  traditions,  must  have  even  more 
sympathetic  insight  than  he  who  describes  far  distant 
times.  Out  of  the  thousand  things  which  he  might  relate 
he  selects  those  which  seem  to  him  to  promote  or  obstruct, 
from  the  standpoint  of  his  ideal  of  hfe.  The  painter  Max 
Liebermann  once  said  to  me,  "  Art  is  omission."  By  this 
phrase  he  distinguished  mechanical  copying  which  indeed 
leaves  out  much,  but  only  such  things  as  chance  not  to 
come  on  to  the  paper,  from  artistic  inspiration  which  can 
recognise  the  essential  matters  and  their  accessories,  which 
dehberately  omits  non-essentials,  and  emphasises  what  it 
is  imperative  to  take  into  account.  In  the  pursuit  of 
truth  this  can  never  happen  from  petty  and  sophistical 
motives,  but  must  spring  of  itself  from  a  rare  "  world- 
philosophy." 

Bismarck  himself  read  much  history,  and  that  history  or 
historical  poetry  of  the  finest  t57pe.  Living  in  what  he  read 
he  finally  proved  in  his  Gedanken  und  Erinnerungen  an 
unrivalled  exponent  of  statesmanhke  ideals.  The  last  and 
best  thing  he  bequeathed  us  was  his  account  of  himself : 
very  intimate  and  not  without  omissions,  mistakes  and 
partialities,  but  teeming  with  the  penetration  of  wisdom. 
He  sang  the  swan  song  of  his  own  epoch  of  empire-making. 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   41 

and  uttered  notes  in  so  doing  which  will  only  be  properly 
heard  when  the  next  new  epoch  dawns.  He  wrote  for  us 
and  for  our  times. 

However,  I  shall  not  speak  at  present  of  his  wonderful 
testament,  but  of  the  historians  who  were  his  predecessors 
and  escort.  There  was  a  school  of  historians  of  the 
foundation  of  the  Empire  in  the  stricter  sense  of  the  word  : 
Amdt,  Raumer,  Dahlmann,  Gervinus,  Hauser,  Bamngarten, 
Droysen,  Sybel,  Treitschke. 

The*  men  differed  among  themselves,  but  they  were 
essentially  of  the  same  family.  They  helped  themselves 
and  many  others  to  an  understanding  of  the  coming  National 
State.  They,  with  their  wave  of  German  national  Liberalism, 
reached  further  than  the  Old  Master  Ranke,  who  in  his 
survey  of  the  whole  of  Europe  embodied  the  older  inter- 
nationahsm  of  the  pre-Napoleonic  Christian  and  aristocratic 
culture.  Many  of  them  have  not  survived  their  own  period 
because  they  belonged  to  it  aU  too  completely.  But  in  the 
golden  days  of  the  Prusso-German  State  such  thinkers  and 
poets  were  needed,  their  task  was  accompUshed  then. 
Mid-Europe  will  need  such  people  now.  It  will  need  more 
than  statesmen  to  think  it  out  aright.  The  statesman  is 
essential  in  his  own  place  in  the  forefront  of  the  poUtical 
scheme.  But  in  the  background  there  must  be  a  whispering 
and  rushing  from  the  far  distant  past ;  visions  of  ancient 
knights,  of  a  passionate  people,  of  battles  lost  and  won,  of 
a  common  emergence  from  bog  and  forest.  The  evolutionary 
basis  of  history  needs  to  be  discovered,  the  Will  which 
controls  matter,  before  and  above  any  description  by 
Reason. 

The  historians  of  the  period  of  the  foundation  of  the 
German  Empire  can  be  divided  into  two  principal  groups, 
the  Mediaeval-Imperial  and  the  Protestant-Prussian.  It  is 
true  that  I  have  tried  in  vain,  with  the  help  of  an  experienced 
friend,  to  classify  every  separate  case  under  these  heads. 
There  are  noticeable  intermediate  types  :  yet  at  bottom  the 
distinction  holds,  Mediaeval-Imperial  or  Prussian  !  The  con- 
tribution of  the  first  group  has  just  now,  at  the  beginning 


42  CENTRAL  EUROPE 

of  the  Mid-European  epoch,  a  renewed  freshness  of  effect, 
for  our  mediaeval  period  is  common  to  all  types  of  Germans, 
whether  in  North  or  South  or  East.  But  the  second  group, 
the  Prussian  historians,  have  imbued  us  Imperial  Germans 
with  something  which  cannot  equally  be  regarded  as  a 
unifying  possession  for  the  Germans  of  the  Danube.  For 
this  second  theme  owes  its  origin  to  the  fight  of  separation 
between  North  and  South.  Hence,  if  now  during  the  Great 
War  we  turn  our  steps  towards  Mid-Europe,  we  are  in 
perpetual  conflict  on  the  way  with  these  teachers  df  our 
own  youth,  especially  with  von  Treitschke,  Sybel,  and  their 
colleagues.  For  if  they  are  absolutely  and  permanently 
right,  then  Bismarck  was  wrong  in  1878.  But  they  were 
only  absolutely  right  for  a  time.  They  remained  reliable 
in  much  for  a  longer  period,  but  the  game  grew  more  exten- 
sive, the  complete  vision  out-distanced  their  revelation,  and, 
as  we  recognise  their  Umitations,  a  new  spiritual  country 
opens  out  before  us.  We  must  here  enter  into  this  point 
rather  more  at  length,  because  without  some  definite  study 
of  this  portion  of  history,  the  Mid-European  ideal  will  seem 
merely  hke  an  old  guide-book  showing  a  few  new  railway 
connections.  There  is  also  much  food  for  thought  in  the 
fact  that  the  historians  of  the  last  decades  are  all  xnore  or 
less  removed  from  the  Empire-making  history.  They  are 
occupied  either,  like  H.  Delbriick,  with  purely  organising 
and  miUtary  statesmanship  as  such,  or  Uke  Hehnolt  and 
Schafer,  with  overseas  international  poUtics,  or  like  Gumplo- 
wicz  and  Lamprecht,  with  the  history  of  social  and  psycho- 
logical culture,  or  above  all  with  the  calm  critical  estimation 
of  past  struggles,  Hke  Fried]  ung  in  Austria. 

****** 
AU  earlier  history  is  primarily  a  history  of  princes.  The 
most  determined  republican  is  powerless  to  alter  this,  for 
in  those  days  poUtical  feeling  was  as  yet  non-existent 
amongst  the  governed.  It  will  prove  a  vain  task  to  attempt 
to  write  a  history  of  the  civilisation  of  the  nations  without 
princes  or  popes.  Such  a  history  is  constitutionally  defec- 
tive, since  every  servant's  coat  has  first  been  worn  by  a 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   43 

gentleman,  and  all  household  furniture  has  first  had  its 
place  in  the  rooms  of  a  princess.  And  even  nowadays 
the  rulers  remaining  to  us  out  of  the  multitude  of  early 
sovereigns  stiU  serve  as  our  models  in  many  things  in  hfe, 
and  are  supreme  over  our  great  armies  in  war  and  peace. 
Theories  to  the  contrary  notwithstanding,  this  is  the  fact ! 
Thus  we  must  look  upon  the  German  mediaeval  period  as 
a  history  of  the  Emperors  in  the  first  place,  before  we  can 
pass  from  them  to  the  people. 

The  early  German  Emperors  are  Central  European  figures 
in  the  fullest  sense  of  the  word,  and  the  type  is  thus  only 
now  becoming  recognisable  again.  The  "  Lesser  Germany  " 
party  are  indeed  unable  to  understand  the  greatest  of 
the  early  Emperors.  Since  1870,  it  is  true,  people  have 
sung  much  in  praise  of  Barbarossa  and  Wilhelm  I.,  but  the 
real  inner  connection  between  the  two  characters  was  lack- 
ing. To-day,  during  this  war  that  extends  from  the  Alps 
to  Anatoha,  to-day  Barbarossa  rises  up  out  of  the  River 
Selef  in  distant  Turkey. 

Our  people  only  know  particulars  about  the  most  import- 
ant of  the  early  German  Emperors  :  Karl  the  Great,  Hein- 
rich  I.,  Otto  I.,  Heinrich  III.,  Heinrich  IV.  (Canossa !), 
Friedrich  Barbarossa,  Friedrich  II.,  Rudolf  von  Hapsburg, 
Maximihan  I.,  Karl  V.  But  throughout  Central  Europe, 
and  wherever  the  German  language  prevails,  a  notion  is 
rooted  firmly  in  the  hearts  of  the  people  that  already  in 
those  days  there  was  a  Mid-European  World  Power.  Even 
if  the  coherence  of  the  Empire  was  often  feeble  in  those 
days  of  overgrown  forests  and  poor  communications,  even 
if  at  times  the  elective  imperial  dignity  seemed  hardly  more 
powerful  than  the  old  elective  monarchy  in  Poland  or 
Hungary,  yet,  throughout  the  Middle  Ages  there  existed  in 
essence  a  desire  for  a  united  Power  ruUng  from  Jutland  to 
the  Adriatic  Sea,  and  even  to  Sicily.  Even  apart  from 
Karl  V.'s  Burgundian  and  Spanish  inheritance,  the  western 
boundary  of  Central  Europe  ran  about  where  the  Germans 
and  French  are  now  entrenched.  It  began  at  Bruges  and 
Ghent,  extended  southwards  almost  as  far  as  St.  Quentin, 


44  CENTRAL  EUROPE 

included  Verdun  and  Toul,  and  in  the  most  vigorous  times 
took  in  Besangon,  Lyon,  Vienne,  and  even  Avignon.  The 
eastern  boundary  certainly  varied  very  much  according  to 
whether  Pomerania,  Bohemia,  Hungary  and  Croatia  were 
joined  to  the  Empire  or  not.  North  and  south  of  the  Alps, 
however,  a  supreme  authority  was  exercised  with  but  few 
intervals  from  the  time  of  Karl  the  Great  to  that  of  Karl  V. 
This  authority  was  indeed  in  the  characteristic  mediaeval 
way  not  always  obeyed,  but  it  was  recognised  as  existing  in 
principle.  It  will  from  henceforth  be  easier  than  before  to 
regard  as  our  forerunner  this  ancient  Empire,  extensive  and, 
on  the  whole,  powerful  as  it  was.  Neither  Imperial  Austria 
nor  Royal  Prussia,  when  separated  from  each  other,  were 
quite  in  a  position  to  carry  on  the  Imperial  tradition,  because 
eiach  only  possessed  a  part  of  the  original  whole.  For 
centuries  the  Empire  of  the  Carolingians,  the  Ottos  and  the 
Hohenstaufen,  has  been  non-existent  and  will  be  so  until 
it  is  bom  again  out  of  the  union  between  the  Hapsburgs 
and  the  HohenzoUems,  between  the  Frisians  and  the  lUy- 
rians,  between  the  Prussians  and  the  Tyrolese.  In  the  more 
distant  past  vague  feeUngs  of  community  have  already 
subsisted  between  them.  There  was  even  a  time  when 
Warsaw  and  Cracow  were  counted  as  belonging  to  the  Hansa 
League.  People  from  aU  parts  of  Central  Europe  travelled 
and  rode  to  the  Reichstag.  Knights  from  every  department 
of  what  is  now  the  German  Empire  and  of  the  Austro- 
Hungarian  Monarchy  journeyed  with  Friedrich  Barbarossa 
to  the  Holy  Sepulchre.  There  was,  in  fact,  in  mediaeval 
Central  Europe  a  pecuHar  community  of  Ufe  and  culture 
which  differed  somewhat  from  anything  in  the  still  confusedly 
intermingled  kingdoms  of  England  and  France,  and  had  no 
analogy  whatever  among  the  Byzantines,  Tartars  or 
Varangians.  The  Germans  occupied  the  centre  of  Central 
Europe,  but  they  drew  in  the  neighbouring  peoples  on  all 
their  borders  :  the  Holy  Roman  Empire  of  the  German 
nation.  Now,  during  the  Great  War,  this  ancient  Empire 
is  striving  and  pushing  under  the  earth,  longing  to  return 
after  its  long  sleep.    Every  aspiration  after  unity  during 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   45 

the  many  confused  centuries  that  have  intervened  has  been 
an  after-glimmer  of  its  light.  And  when,  a  hundred  years 
ago,  the  wars  of  liberation  against  Napoleon  imited  all  the 
German  races  for  a  short  time,  the  prophets,  with  poetic 
reminiscence,  sang,  as  of  old,  of  Emperor  and  Empire : 
Germany  shall  be  one  !  Are  you  not  conscious,  in  this  super- 
human war,  of  the  spirits  of  our  ancestors  ?  Do  our  sons 
go  side  by  side  to  their  death  merely  because  of  a  written 
treaty,  or  is  there  something  behind  ?  Did  not  the  clouds 
mass  themselves  in  the  sky  over  the  Carpathians  and  over 
Antwerp  as  though  in  an  attempted  greeting  of  knights  and 
war-horses  of  old  ?  All  this  was  once  one  Empire  !  Now 
it  is  only  the  dream  of  an  Empire.  What  will  it  become  ? 
*♦*»*♦ 
Of  all  the  mediaeval  Empires,  Central  Europe  remained 
longest  in  its  amorphous  and  imorganised  condition.  Whilst 
France  and  England  on  the  one  hand,  and  Russia  on  the 
other,  grew  comparatively  quickly  and  easily  into  single 
coherent  political  entities,  the  centre  of  the  Continent  from 
Sweden  to  the  Neapolitan  kingdom  remained  a  territory 
of  innumerable  small  States.  One  important  reason  for 
this  appears,  as  we  have  already  noticed,  to  lie  in  the  fact 
that  the  Emperor  was  elected.  In  all  States  where  the 
monarch  is  elected,  it  is  a  matter  of  experience  that  the 
electing  portions  develop  to  excess  at  the  expense  of  the 
whole,  for  each  election  multipHes  their  particularist  claims. 
Besides  this  the  physical  character  of  Central  Europe  has 
from  the  outs.et  encouraged  numerous  subdivisions,  and 
there  was  no  mediaevaJ  capital.  The  Eternal  City  of  Rome 
was  always  looked  upon  as  the  Imperial  City  of  the  Western 
World  and  the  earlier  Emperors  generally  had  itinerant 
Courts.  Hence  north  of  the  Alps  no  resident  Government 
was  established  or  encouraged.  Central  Europe  produced 
nothing  north  of  the  Alps  that  could  be  compared  with 
Rome,  Constantinople,  Moscow,  Paris  or  London,  for  all 
our  mediaeval  towns  lacked  the  crystallising  power  of  a 
ruler.  Neither  Cologne,  nor  Mainz,  nor  Frankfurt,  Augs- 
burg,   Niimberg,    nor    Hildesheim,    Liibeck,    Leipzig,    nor 


46  CENTRAL  EUROPE 

Prague,  Graz,  Vienna,  was  a  European  metropolis.  It  was 
only  with  the  rise  of  the  Northern  and  Southern  Ostmarks 
in  the  later  Middle  Ages  that  the  older  Vienna,  and  in  still 
more  recent  times  the  more  modem  Berlin,  grew  up  :  two 
centres  neither  of  which  was  in  itself  the  recognised  capital 
of  Central  Europe.  Perhaps  the  reader  has  seen  in  scientific 
books  an  illustration  on  a  large  scale  of  the  process  of  cell- 
division  :  one  cell  acquires  two  nuclei,  and  loses  its  form 
more  and  more  as  these  two  nuclei  recede  from  one  another. 
It  was  something  the  same  with  Central  Europe  after  the 
time  of  Karl  V.  Or  to  put  it  otherwise  :  the  controlling 
authority  moved  from  west  to  east  and  spHt  into  two 
halves,  which  fought  each  other.  But  at  the  same  time 
there  remained  an  undoubted  connection,  which  could  be 
stretched,  and  at  times  also  broken,  between  almost  all  the 
sections  which  had  once  been  united  under  the  Ottos  or 
the  Hohenstaufen.  The  result  is  a  withering  up  of  the 
Imperial  idea  on  the  left  bank  of  the  Rhine,  and  as  com- 
pensation a  forward  pressure  of  Germanism  into  Poland, 
Lithuania,  Bohemia,  Moravia,  and  even  into  the  Southern 
Slav  provinces  under  Turkish  rule. 

It  is  indeed  not  quite  verbally  accurate,  if  we  express  it 
so  briefly  as  we  have  just  done,  to  say  that  both  the  new 
centres  of  authority  became  the  means  of  spreading  the 
energy  of  Germanism  into  the  East.  BerUn  has  done  httle 
more  than  concentrate  the  effects  of  work  done  earUer  in 
East  Prussia,  Pomerania,  and  Mecklenburg.  And  Vienna 
has  generally  been  more  occupied  with  extending  its  authority 
towards  the  East  than  with  spreading  German  influence. 
After  all,  the  main  point  is  this  :  the  two  leading  Powers 
that  were  advancing  eastwards  were  hampered  by  a  form- 
Jess  structure :  the  German  Empire,  a  country  full  of 
splendid  cities  and  cathedrals,  with  golden  crops  and  precious 
vineyards,  but  without  military  strength  of  its  own  and 
without  poUtical  feehng.  Whilst  both  struggled  forward 
to  the  East  they  quarrelled  on  their  van  about  PoHsh  terri- 
tory, on  their  flank  about  Silesia  and  Saxony,  and  on  their 
rear  about  all  the  absurd  triviahties  of  spiritual  and  worldly 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   47 

princes,  about  the  continual  lawsuits  over  the  inheritances 
of  the  nobility,  about  the  regulation  of  the  boundaries  of 
the  pigmy  domains,  and  about  the  war  subsidies  of  the 
French  and  EngUsh.  This  was  the  pitiable  condition  of 
German  affairs  when,  finally,  Napoleon  I.  burst  upon  them 
with  threats  and  disturbance.  Nowhere  else  could  he  have 
founded  the  Confederation  of  the  Rhine.  But  the  Confedera- 
tion of  the  Rhine  was  the  end,  the  final  complete  end  of  the 
history  of  the  ancient  German  Empire.  The  old  Crown  was 
laid  aside.  Finis  Germanice !  When  and  how  shall  it 
come  again  ?     In  what  intermediary  form  and  by  what 

stages  ? 

****** 

With  the  Napoleonic  period  the  second  stage  in  the  history 
of  Central  Europe  begins,  the  stage  in  which  we  are  still 
Hving.  The  old  Imperial  drama  had  been  played  through 
to  the  end.  Central  Europe  was  full  of  historical  rubbish, 
and  was  pressed  backwards  and  forwards  between  West 
and  EcLst.  The  effective  power  at  the  beginning  of  the 
nineteenth  century  was  in  the  hands  of  Napoleon  and 
Alexander  I.  of  Russia,  behind  whom  were  the  Enghsh. 
This  is  not  the  place  to  discuss  the  personal  characteristics 
of  the  Tsar  Alexander,  but  for  the  purposes  of  this  sketch 
he  may  be  regarded  as  the  embodiment  of  the  Russian 
power  and  as  the  predecessor  of  Nicholas  I. 

There  are  two  principal  advances  in  the  Napoleonic  War  : 
one  from  Paris  to  Moscow,  and  one  from  Moscow  to  Paris. 
In  both  cases  Central  Europe  was  pushed,  first  eastwards 
by  Napoleon,  and  then  westwards  by  the  Tsar  Alexander. 

The  advance  from  Paris  to  Moscow  (1805-1812)  might 
have  been  held  up  on  the  Rhine  if  "  the  Empire  "  had  had 
any  real  significance  ;  the  advancing  army  would  have  been 
pent  up  before  the  Bohmerwald  if  the  two  leading  Powers 
had  fought  in  partnership  instead  of  letting  themselves  be 
defeated  separately,  but  there  was  no  community  of  feehng. 
It  was  in  Napoleon's  "  great  army  "  that  the  Austrians  and 
Prussians  first  learnt  to  march  side  by  side.  In  June 
200,000  French,  45,000  Itahans,  79,000  Bavarians,  Saxons, 


48  CENTRAL  EUROPE 

Hessians,  Wurttembergers,  etc.,  34,000  Austrians  and  Hun- 
garians, 32,000  Prussians,  50,000  Poles,  advanced  on  to 
Moscow.  This  was  the  first  occasion  on  which  Central 
Europe  acted  in  concert. 

The  advance  from  Moscow  to  Paris  (1812-1815)  presents 
the  reverse  picture.  In  August  1813,  160,000  Russians, 
130,000  Austrians  and  Hungarians,  180,000  Prussians, 
20,000  Swedes  marched  from  East  to  West.  The  further 
the  allied  army  pressed  onwards  towards  the  west  after 
the  Battle  of  Leipzig,  the  more  it  attracted  Central  European 
troops  to  itself,  so  that  finally  aU  Germany  crossed  the 
Rhine.  This  was  the  second  occasion  on  which  Central 
Europe  acted  in  concert ! 

It  is  important  to  picture  to  ourselves  thus  briefly  the 
events  of  the  Napoleonic  period,  in  order  not  to  be  left 
buried  in  the  history  of  individual  States.  In  the  schools 
of  the  German  Empire  we  foster  a  presentation  of  history 
which  lays  aU  the  emphasis  on  the  Prussian  struggle  for 
national  freedom,  and  we  know  that  in  Austria  much  more 
weight  is  put  on  the  clever  diplomacy  of  the  Court  which 
under  difiicult  circumstances  saved  what  there  was  to  save. 
The  first  important  common  experience  of  the  two  States 
is  not  thought  of  as  "  common  "  in  history,  because  people 
on  both  sides  are  afraid  to  admit  unreservedly  that  a  hundred 
years  ago  Napoleonic  France  could  not  be  repulsed  without 
Russia.  When  the  three  rulers  of  Russia,  Austria-Hungary 
and  Prussia  stood  on  the  King's  HiU  at  Leipzig,  the  Russian 
was  the  strongest  of  them  because  he  had  already  freed  his 
own  country.  When  Alexander  advanced  on  Paris  in 
triumph,  and  the  Central  Europeans  accompanied  him  and 
did  what  he  wanted,  they  still  went  on  quarreUing  amongst 
themselves,  and  begging  the  great  man  from  the  East  to 
be  their  friend  and  arbitrator.  Baron  von  Stein  accom- 
plished his  work  for  his  passionately  loved  German  Father- 
land more  by  the  help  of  the  Russian  Tsar  than  by  that 
of  the  Prussian  King.  The  events  of  the  Vienna  Congress 
require  this  background  to  explain  them. 

The  Vienna  Congress  re-established  Central  Europe  under 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   49 

Russian  protection.  We  will  not  absolutely  condemn  the 
German  Constitution  as  then  drawn  up.  In  spite  of  its 
obvious  weaknesses  and  faults  it  was  yet  the  first  attempt 
at  the  task  with  which  we  are  now  occupied  afresh.  This 
task  demands  a  much  more  careful  study,  before  the  new 
Peace  Congress  which  is  ahead  of  us,  than  it  has  received 
for  fifty  years.  With  it  will  begin  the  struggle  about  the 
future  form  to  be  adopted  by  these  provinces  and  peoples, 
who  now  defend  themselves  independently  and  successfully 
against  East  and  West,  against  France  and  Russia,  and 
faced  by  the  opposition  of  England.  Formerly  Central 
Europe  was  a  mass  of  rubble,  now  we  see  it  hardening  into 
stone  before  our  eyes.  The  difference  is  immense.  A 
century  has  wrought  wonders.  We  now  hold  the  centre 
by  our  own  strength  against  Russia,  France,  and  England, 
and  a  few  others  besides.  If  only  Baron  von  Stein  could 
see  it ! 

The  Napoleonic  period  has  a  special  significance  for  the 
soul  of  Central  Europe,  because  it  planted  a  political  and 
democratic  spirit  in  the  people.  Napoleon  appeared  as  the 
personification  of  the  French  Revolution,  and  as  a  personal 
dictator  made  great  reforms  both  directly  and  indirectly. 
The  completion  of  the  Uberation  of  the  serfs,  so  far  as  it 
could  be  accomplished  in  face  of  the  opposition  of  the  old 
landed  proprietors,  was  the  result  of  Napoleon's  subversive 
influence  on  all  conditions  of  Hfe.  What  Maria  Theresa, 
Joseph  II.,  and  Friedrich  II.  Uked  to  confer  as  a  favour  to 
the  people  from  above,  now,  amid  the  gleam  of  weapons, 
took  the  form  of  a  popular  demand.  The  temporary  re- 
estabUshment  of  Poland  had  a  nationaUsing  effect  on  its 
neighbours.  The  rise  of  Prussia  displayed  a  king  urged 
forward  to  victory  by  the  popular  will.  Universal  con- 
scription in  Prussia  made  subjects  into  supporters  of  the 
State.  The  fragile  nature  of  kingdoms,  both  great  and 
small,  was  obvious.  Everywhere  there  was  fermentation 
and  effervescence.  A  new  epoch  was  striving  to  emerge, 
a  national  epoch.     But  the  new  still  lacked  form  and  was 


50  CENTRAL  EUROPE 

without  tradition  and  without  technical  skill  in  Parliamen- 
tary politics,  so  that  at  first,  in  the  lassitude  following  on 
the  unspeakable  labours  of  the  war,  it  remained  weaker 
than  the  practised  skill  of  the  old  Governments.  The 
Governments  made  many  promises  to  the  developing  peoples, 
without  carrying  them  out,  partly  because  they  were  un- 
willing, partly  because  they  could  not.  The  best  of  the 
soldiers,  Hke  Bliicher,  hung  their  swords  upon  the  wall 
discontentedly,  because  this  peace  and  this  congress  did  not 
repay  their  efforts.  Mid-Europe  had  desired  to  come  into 
existence,  but  had  not  done  so.  Nevertheless  the  new  seed 
remained  in  the  ground.  There  was  now  a  period  of  secret 
growth  from  1815  till  1848.  The  ideal  of  a  free  German 
Empire  in  its  ancient  strength  and  splendour  developed, 
and,  too,  the  nationalist  demands  of  the  frontier  peoples 
developed,  hopes,  difficulties  and  possibilities  developed. 
AH  this  happened  whilst  officially  the  two  Central  European 
Powers  were  allowing  themselves  to  be  led  and  checked 
by  Russia.  Indirectly,  first  Alexander  I.  and  then  Nicolas  I. 
was  the  Regent  of  Central  Europe.  The  German  provinces 
lay  at  the  Tsar's  feet  Hke  superior  Balkan  States,  which 
had  obtained  their  freedom  from  Russia.  The  East  had 
conquered  in  the  struggle  between  West  and  East,  and  made 
use  of  her  victory. 

Things  went  on  in  this  way  until  in  1848  a  fresh  wave 
of  democratic  feeHng  surged  out  of  France  in  the  West  up 
to  the  frontiers  of  the  Russian  Empire.  The  Paris  Revolu- 
tion concerned  all  Europe.  It  affected  Central  Europe  as 
far  as  Warsaw  and  Budapest,  almost  Hke  Napoleonism 
without  Napoleon.  The  soul  of  the  West  sweUed  up  against 
the  authority  of  the  East.  This  authority  was  more  severely 
shaken  in  Vienna  than  in  Berlin,  because  Vienna  had  offered 
less  scope  to  the  spirit  of  the  wars  of  Hberation  than  Berlin, 
and  because  the  national  principle  in  Hungary  risked  its 
great  and  vigorous  passage  of  arms  on  this  occasion.  The 
middle  classes  and  the  townsfolk  in  Germany  and  Austria 
now  wanted  to  put  in  their  word,  the  educated  class  demanded 
a  share  in  general  poHtics,  the  tax-payers  claimed  to  be 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   51 

consulted  about  their  money.  Every  little  street  and  square 
resounded  once  again  with  German  problems,  citizens'  rights 
and  constitutional  demands.  But  once  again  the  new  spirit 
lacked  the  energy  of  definiteness,  for  it  was  non-miHtary. 
Wrangel  in  Berlin,  and  Windischgratz  in  Vienna,  proved 
stronger  than  all  the  popular  riots.  In  Hungary  alone  did 
the  revolution  appear  on  the  scene  with  its  own  army ; 
Austria  was  too  much  undermined  to  suppress  the  Hun- 
garians, and,  therefore,  summoned  the  Russians  across  the 
Carpathians,  the  same  Russians  who  are  now  pent  up  in 
these  same  passes,  and  resigned  to  the  Tsar  Nicolas  I.  the 
task  of  protecting  its  tottering  authority.  Nothing  is  so 
characteristic  of  the  condition  of  Central  Europe  at  that 
time  as  this  proceeding. 

But  although  the  revolution  had,  and  could  have,  on  the 
whole,  no  triumphant  result,  yet  it  led  to  essential  progress 
as  compared  with  1815,  to  wit  the  beginning  of  Parhamentary 
life  in  the  representative  assembUes,  such  as  they  were,  and 
the  renewed  attempt  to  work  out  the  Central  European 
problem  of  the  Vienna  Congress  with  fresh  energies  in  St. 
Paul's  Church  at  Frankfurt-on-Main.  The  constitutional 
content  for  the  new  structure  of  Central  Europe  which  was 
thus  attained  was  indeed  of  small  importance  in  poUtical 
law,  but  it  was  in  itself  a  great  matter  that,  in  1848  and 
1849,  a  ParUament  existed  in  which  Central  Europe,  in  so 
far  as  it  spoke  German,  was  represented.  Wise  things  were 
said  in  St.  Paul's  Church  about  all  the  Central  European 
problems,  ranging  from  Italy  to  Denmark,  from  the  French 
frontier  to  Poland  and  Hungary.  The  spirit  was  stirred, 
the  political  atmosphere  was  favourable  to  the  debate, 
nothing  was  lacking  but  what  we  now  have  in  the  war,  the 
pressure  of  foreign  events  and  the  strength  of  the  army. 
What  was  said  was  by  way  of  prelude,  a  mere  testing  of 
the  instruments.  But  then  everything  Central  European 
was  submerged  again,  and  the  Bundestag  held  once  more  in 
the  Eschersheimer  Gasse  in  Frankfurt,  those  meetings  which 
we  know  so  well  from  Bismarck's  letters  and  reports. 


52  CENTRAL  EUROPE 

In  the  course  of  the  Frankfurt  discussions  there  was  a 
painful  and  grievous  divergence  between  the  "  Greater 
Germany "  and  the  "  Lesser  Germany "  views.  At  the 
voting  for  the  election  of  King  Friedrich  Wilhelm  IV.  of 
Prussia  to  be  German  Emperor,  290  members  voted  for  the 
Prussian  hereditary  Emperor,  and  240  members  refrained 
from  voting.  The  German- Austrians  had  in  part  withdrawn, 
the  Tzechs  had  not  got  beyond  considering  the  possibility 
of  attending,  the  other  sections  of  the  Central  European 
peoples  were  absent,  because  it  was  a  question  of  establishing 
not  Mid-Europe  but  the  German  Empire.  Thus  in  this 
combination  there  existed  a  strong  minority  who  did  not 
wish  to  adhere  to  the  views  of  the  Prussian  "  Lesser 
Germany  "  party,  and  who  still  beUeved  in  a  joint  federal 
State  since  they  hoped  for  a  "  rejuvenated  Austria."  The 
majority  tendered  the  Crown  to  the  King  of  Prussia,  but 
he  refused  it.  In  this  way  the  whole  poUtical  problem  of 
Germany  and  Central  Europe  was  disposed  of,  and  no  one 
knows  how  and  with  what  results  it  might  have  been 
reopened  had  not  Bismarck,  acting  on  other  assumptions, 
adopted  the  "  Lesser  Germany  "  view  and  carried  it  through. 
The  Frankfurt  majority  started  with  a  fixed  desire  for 
German  unity,  and  for  its  sake  had  come  to  terms  more  or 
less  wiUingly  with  the  idea  of  the  Prussian  King  as  Emperor. 
Bismarck,  on  the  other  hand,  took  Prussian  power  as  his 
starting-point  and  adopted  the  German  view  in  order  to 
advance  this  power.  He  was  in  no  sort  of  sense  a  German 
revolutionary,  but,  on  the  contrary,  a  decided  opponent  of 
the  popular  movement ;  nevertheless  in  order  to  carry  out 
his  royaUst  poUcy  he  was  obliged  to  take  up  the  nationaUst 
demands  of  the  time. 

It  is  essential  for  our  purpose  to  grasp  Bismarck's  attitude 
as  well  and  as  comprehensively  as  possible,  because  it  is  a 
point  of  critical  importance  for  the  Mid-European  scheme 
whether  it  be  carried  through  with  or  in  opposition  to  the 
spirit  of  Bismarck.  In  the  latter  case  it  would  be  con- 
demned to  futility.  We  must,  therefore,  inquire  more 
closely  what  induced  Bismarck  to  enter  upon  the  war  of 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   53 

1866  and  to  bring  into  being  a  "  Lesser  German  "  State 
on  a  monarchical  basis. 

Even  before  his  days  of  triumph  he  Uved  more  in  an 
atmosphere  of  foreign  than  of  home  poUtics,  and  as  a 
young  man  was  unusually  familiar  with  the  contemporary 
fluctuations  in  Jhe  balance  of  power  in  Europe.  Moreover 
he  had  an  absolute  genius  for  things  military.  Hence  it 
came  about  that  he  had  no  confidence  in  any  German 
imity  which  was  indefinite  from  the  mihtary  point  of  view, 
nor  consequently  in  the  Frankfurt  Constitution.  How 
could  an  effective  mihtary  unity  be  estabhshed  if  small 
States,  incompetent  in  the  mihtary  sense,  had  an  important 
voice  in  the  Federal  Assembly  ?  We  must  not  forget  that 
the  Prussia  of  1850  possessed  much  less  territory  in  Germany 
than  the  Prussia  of  1867  as  enlarged  by  Bismarck !  The 
corresponding  chapters  of  the  Gedanken  und  Erinnerungen, 
like  the  earher  notes  made  by  Bismarck  in  the  fifties,  are 
interspersed  throughout  by  mihtary  considerations.  After 
the  humiliation  at  Olmiitz  when,  owing  to  anxiety  about 
the  Austrian  army  in  Bohemia,  Prussia  had  to  give  up  her 
claims  to  Kurhessen  and  Schleswig-Holstein  at  the  demand 
of  Schwarzenberg,  the  Austrian  Minister-President,  it  would 
have  been  impossible  for  her  to  carry  on  a  "  Greater 
Germany  "  poUcy  if,  simultaneously,  she  wished  in  the  first 
instance  to  attain  mihtary  importance  as  a  North  German, 
non-Austrian  Power.  Then,  in  addition,  came  the  influ- 
ence of  the  Crimean  War,  of  which  in  general  we  in  the 
German  Empire  knew  very  httle,  but  which  Bismarck  hved 
through  with  his  full  powers  of  sympathetic  interest.  The 
Crimean  War  freed  Austria  from  Russian  guardianship,  and 
secured  its  inclusion  in  the  existing  group  of  Western 
Powers.  It  is  possible  now,  after  the  event,  to  think  that 
it  might  have  been  better  in  fact  for  Central  Europe  if  as  a 
whole  it  had  joined  with  the  West  to  attack  Russia  in  the 
Crimean  War,  had  freed  Poland  and  had  driven  back  the 
Russians.  We  are  much  inchned  just  now  to  form  a  retro- 
spective wish  of  this  kind,  but  at  that  time  Prussia  still 
retained  in  its  blood  too  much  of  the  fear  of  the  unmeasured 


54  CENTRAL  EUROPE 

force  of  the  French  Revolution  ;  for  1870  had  yet  to  be  lived 
through,  and  the  Prussian  king  was  used  to  Russian  super- 
vision. He  remained  a  trembling  neutral  hke  the  present 
King  of  Roinnania.  Under  these  circumstances  Bismarck 
learnt  the  helplessness  of  the  German  Confederation.  Was 
there,  then,  any  other  aim  for  his  unusual,  overpowering 
and  abounding  energy  than  to  estabUsh  his  Prussia  and  to 
secure  for  it  by  mihtary  means  the  control  of  the  German 
Federation  ?  Only  so  could  there  be  any  foreign  poUcy  for 
him,  which  really  deserved  the  name  of  poHcy.  The  strong 
man  must  first  make  for  himself  a  theatre  or  arena,  he  must 
build  up  a  position  for  his  sovereign  so  that  there  might  be 
place  for  purposive  action.  And  the  course  of  events  up 
to  1866  showed  that  he  was  right.  He  created  what  the 
majority  in  St.  Paul's  Church,  with  their  military  unpre- 
paredness,  had  merely  put  forward  as  a  pious  wish.  He 
created  it  differently  from  an5rthing  imagined  by  these 
learned  men,  but  still  he  created  it.  It  was  he,  together 
with  his  sovereign  and  with  Moltke,  who  completed  the 
work  of  Friedrich  II.  of  Prussia,  and  who,  at  the  same 
time,  carried  out  the  popular  demands  of  the  "  Lesser 
Germany  "  party  in  St.  Paul's  Church. 

But  as  soon  as  the  revolution  in  the  condition  of  the 
German  army  was  completed,  and  after  the  victory  of 
Konigsgratz,  he  began  at  once  and  without  reserve  to 
consider  the  preservation  of  Austrian  inviolabihty,  and 
extorted  it  from  the  Prussian  king  and  his  generals.  Thus 
it  appears  that  he  and  he  alone  at  bottom  thinks  in  terms  of 
Central  Europe,  taking  that  as  his  environment  whole.  His 
own  account  of  the  Bohemian  deUberations  is  a  most 
weighty  document  in  connection  with  our  train  of  thought. 
He  does  not  want  a  German  Empire  with  Hungary,  Gahcia, 
etc.,  excluded,  nor  a  purely  German  national  State  with  no 
counterpart  in  historical  experience.  But  he  does  want 
to  retain  permanently  the  possibihty  of  a  imion  of  the 
two  Great  Powers  lying  between  East  and  West.  He 
never  forgot  that  France  and  Russia  might  conceivably 
attempt  to  crnsh  4  centre  that  wfis  not  indivisible.    All  his 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   55 

later  policy  was  implied  in  his  dispute  with  King  Wilhelm 
at  Nikolsbiirg  over  the  "  shameful  peace."  In  case  of 
doubt  he  was  always  more  Austrian  than  Russian.  His 
considerations  read  as  follows  : 

"  If  Austria  were  seriously  injured,  she  would  become  a 
confederate  of  France  and  of  all  opponents ;  she  would 
sacrifice  her  anti-Russian  interests  for  the  sake  of  revenge 
against  Prussia.  On  the  other  hand,  I  can  imagine  no 
future  acceptable  to  us  for  the  countries  which  constitute 
the  Austrian  kingdom,  supposing  that  the  latter  were 
destroyed  by  Hungarian  or  Slavonic  rebeUions  or  were 
reduced  to  a  state  of  permanent  dependence.  What  could 
take  that  position  in  Europe  which  the  Austrian  State  has 
hitherto  occupied  from  the  Tyrol  to  the  Bukowina  ?  Any 
fresh  States  formed  in  this  area  could  only  be  of  a  persistently 
revolutionary  character.  We  could  make  no  use  of  German- 
Austria  either  in  whole  or  in  part,  we  could  not  secure  a 
strengthening  of  the  Prussian  State  by  the  inheritance  of  pro- 
vinces such  as  Austrian  Silesia  or  parts  of  Bohemia,  no  union 
between  German-Austria  and  Prussia  could  be  successful. 
Vienna  could  not  be  governed  as  a  suburb  of  BerHn." 

Thus,  in  his  old  age,  Bismarck  subsequently  described  in 
writing  his  position  in  1866,  and  thus  does  he  wish  to  be 
regarded  by  posterity.  On  no  account  does  he  wish  to  be 
registered  in  the  memories  of  later  generations  as  the 
destroyer  of  ancient  German  unity  and  of  the  Central 
European  aUiance.  And  in  fact  he  succeeded  in  making 
his  pohcy  understood  by  Austria  and  Hungary  in  the  course 
of  a  few  years  and  during  his  own  lifetime.  In  1866  there 
was  an  alteration  of  the  centre  of  gravity,  but  no  destruction 
of  the  germs  of  that  Mid-Europe  which  is  now  at  last  coming 
into  being. 

The  Franco-German  War  of  1870-71  meant  the  final 
Hberation  of  Central  Europe  from  France.  The  present 
generation  hardly  knows  what  an  extensive  influence  France 
exercised  before  the  war  in  Southern  and  Central  Germany, 
and  how  much  incUncd  Austria  was  to  wrest  from  Prussia, 


56  CENTRAL  EUROPE 

with  the  aid  of  France,  what  had  been  gained  in  1866. 
Hence  nowadays  people  pass  hghtly  over  those  passages  in 
Bismarck's  Erinnerungen  where  he  speaks  of  the  danger  of  a 
new  Confederation  of  the  Rhine.  To  us  to-day  the  Rhine 
Confederation  is  a  distant  and  barely  conceivable  tradition, 
but  then  it  was  still  in  the  region  of  practical  poHtics. 
Central  Europe  stood  between  East  and  West,  and  as  yet 
on  no  independent  footing.  I  remember  a  trivial  experience 
of  my  boyhood  :  the  leading  townsfolk  in  our  Httle  town  in 
the  Saxon  Erzgebirge  were  talking  together  in  July  1870  : 
"  We  Saxons  are  aU  right ;  now  we  keep  in  with  Prussia 
because  we  must,  but  the  French  if  they  come  wiU  know 
that  we  did  not  want  to  do  it !  "  This,  or  something  hke  it, 
was  what  a  good  many  people  were  thinking.  The  French 
magic  spell  had  first  of  aU  to  be  completely  severed,  and  was 
in  fact  splendidly  destroyed.  In  this  way  Bismarck  fully 
reaped  the  advantage  of  1866  :  Southern  Germany  joined 
the  North  German  Confederation,  and  the  German  Empire 
came  into  existence.  Now  there  was  a  North  German 
Emperor.  Without  any  fresh  injury  to  Austria  the  lesser 
German  Empire  arose,  a  triumphant  victory  for  those  who 
as  early  as  1848  had  looked  forward  to  this  and  this  only ; 
as  yet,  however,  the  prophecies  of  Untersberg  and  Kyffhauser 
were  not  completely  fulfilled. 

Those  were  wonderful  days  when  North  and  South 
Germany  conquered  France  together.  That  was  a  victory 
without  Russia's  aid,  though  with  her  acquiescence  ;  that 
was  the  victory  over  all  forms  of  protectorship  in  the  West, 
the  chance  to  be  free  after  a  hundred  years  of  a  comphcated 
dependence  !  Even  Austria,  in  spite  of  aU  despondency, 
felt  that  she  too  would  gain  her  freedom  by  this  war.  The 
Wacht  am  Rhein  was  sung  even  on  the  neutral  Danube.  The 
Battle  of  Leipzig  was  repeated  in  France  in  1870  without  the 
help  of  the  Tsar.     By  the  blessing  of  God,  what  a  change ! 

In  attempting  to  formulate  the  results  of  the  Franco- 
German  War  from  the  Austro-Hungarian  point  of  view 
we  must  reckon  it  a  loss  for  Austria  that  "  the  Empire," 
and  in  particular  the  South  German  States,  came  under 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   57 

North  German  leadership  for  all  time  as  far  as  could  be 
foreseen,  so  that  the  ancient  Hapsburg  period  of  Empire 
was  now  for  the  first  time  completely  at  an  end  for  the  rest 
of  Germany.  Austria-Hungary  had  now  no  longer  an 
indefinite  background  in  the  west,  she  possessed  her  own 
borders  and  nothing  more.  But  at  the  same  time  she 
gained  a  strong  and  victorious  friend  who  could  strengthen 
her  strength  and  compensate  for  her  weakness.  InteUigent 
people  in  Vienna  and  Budapest  understood  this  at  once, 
and  under  the  leadership  of  Graf  Andrassy  and  with  the 
consent  of  the  Emperor  Franz  Joseph  they  acted  accordingly. 
It  is  most  instructive  for  Germans  of  the  Empire  to  read 
the  history  of  the  year  1870  in  Wertheimer's  book  :  Graf 
Julius  Andrassy,  sein  Leben  und  sein  Zeit  (Stuttgart,  1910). 
There  we  learn  to  look  from  an  outside  point  of  view  at 
events  which  as  Germans  we  have  experienced  from  the 
inside.  At  the  beginning  of  the  war  Andrassy  was  in 
favour  of  neutrahty,  because  he  cherished  a  hope  that 
France  and  Prussia  would  weaken  themselves  in  a  mutual 
war,  and  that  hence  the  critical  part  of  arbitrator  might  faU 
to  Austria-Hungary  at  the  conclusion  of  peace.  Beust,  the 
Austrian  Minister-President,  wished  to  join  in  against 
Prussia,  but  the  far-sighted  Hungarian  insisted  on  neutrality, 
and  the  unexpected  Prusso-German  victory  justified  him. 
He  may  be  called  the  saviour  of  Mid-Europe,  for  if  at  that 
time  Austria  had  attempted  to  settle  her  accounts  with 
Prussia  again,  then  whatever  the  immediate  outcome,  no 
conunon  future  would  have  been  possible.  Thus  Andrassy, 
in  1870,  showed  himself  to  be  the  same  man  with  whom 
later  Bismarck  was  to  conclude  the  treaty  of  1879.  If  we 
ever  succeed  in  giving  a  poUtical  shape  to  Mid-Europe 
the  portraits  of  Bismarck  and  Andrassy  ought  together  to 
be  wreathed  with  laurels  of  gratitude  and  honour. 

The  western  Hmits  of  Central  Europe  were  thus  fixed  in 
1871,  a  settlement  of  boundaries  on  the  Russian  side  had 
to  follow.  In  the  autumn  of  1876  Bismarck  received  a 
telegram  in  code  from  Livadia,  which  demanded  on  behalf 


58  CENTRAL  EUROPE 

of  the  Tsar  a  statement  as  to  whether  or  no  the  German 
Empire  would  remain  neutral  if  Russia  went  to  war  with 
Austria.  Never  was  there  a  more  fateful  question.  After 
attempts  at  delay  had  failed,  Bismarck  answered  that  we 
could  tolerate  it  if  our  friends  merely  lost  and  won  battles 
against  each  other,  but  not  if  one  of  them  was  so  severely 
injured  as  to  endanger  her  independent  position  as  one  of 
the  influential  Great  European  Powers.  In  virtue  of  this 
answer  Russia  came  to  an  amicable  understanding  with 
Austria  about  Bosnia  and  Herzegovina  and  entered  upon  a 
Russo-Turkish  instead  of  a  Russo-Austrian  War. 

The  outcome  of  these  events  was  the  Berlin  Congress 
of  1878  and  the  Dual  AUiance  of  1879,  and  with  these 
events  the  traditional  alliance  between  Russia  and  Prussia 
was  practically  at  an  end.  The  impression  produced  by 
the  King's  Hill  at  Leipzig  had  faded.  Bismarck  did  indeed 
preserve  a  certain  connection  with  Russia  in  the  shape  of 
the  counter-insurance  treaty,  but  the  partnership  between 
Russia  and  Prussia  was  dissolved.  The  die  was  cast.  Dual 
AUiance  was  formed  in  opposition  to  Dual  Alliance  :  Mid- 
Europe  between  East  and  West.  It  may  be  said  that  the 
present  war  had  its  beginnings  in  1876.  The  Russians  for 
their  part,  it  is  true,  proposed  a  Russo-German  Alliance  even 
after  1876,  but  the  German  Empire  was  bound,  it  was 
married  to  Austria-Hungary  for  life  and  for  death.  And 
thus  both  the  Empires  have  passed  through  the  last  three 
decades  together,  thus  to-day  they  are  fighting  shoulder  to 
shoulder  and  thus  wiU  they  continue. 

This  alliance  agreed  to  by  Graf  Andrassy  and  Bismarck 
in  1879,  ^^^  which  constituted  Andrassy 's  last  important 
act,  is  in  no  sense  to  be  looked  upon  as  the  temporary 
outcome  of  a  fluctuating  political  situation.  After  the 
Franco-German  War  Bismarck  indeed  originally  wanted  to 
re-establish  a  triple  alliance,  in  accordance  with  old  custom, 
between  Russia,  Germany  and  Austria ;  the  triple  imperial 
alliance  of  the  monarchical  system  in  opposition  to  all 
western  disorganisation.  With  this  object  in  view  he 
arranged  various  meetings  between  the  three  Emperors 
from  1872  onwards.     But  these  grand  visiting  days  did  not 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   59 

prevent  the  fateful  question  of  1876.  The  statesman  of 
Central  Europe  was  obUged  to  renounce  the  dream  of  the 
King's  Hill,  and  to  say  definitely,  very  definitely,  whether 
or  no  he  wished  to  uphold  Austria-Hungary  at  aU  costs  and 
in  every  danger.  Any  one  who  now  wants  to  dissolve  the 
German-Austrian-Hungarian  aUiance  throws  us  back  pohti- 
cally,  as  we  have  already  said,  to  before  1876,  and  obHges 
us  to  consider  over  again  all  the  pros  and  cons  of  the  Russian 
question  of  that  date.  This  reconsideration  wiU  do  no 
harm,  for  it  must  inevitably  lead  back  to  Bismarck's  decision, 
which  was  certainly  not  adopted  lightly  or  without  the 
most  exact  knowledge  of  all  contingencies. 

When  deaUng  with  the  formation  of  the  Dual  AUiance, 
Bismarck  mentions  the  following  reasons  for  hesitation : 
changeableness  of  Hungarian  opinion,  uncertainty  as  to  the 
behaviour  of  the  Germans  in  Austria,  danger  of  Catholic 
ascendancy  over  Protestantism,  anxiety  about  PoUsh  desire 
for  dominance  on  the  Austrian  basis.  A  treaty  of  aUiance 
would  be  of  Uttle  avail  against  aU  this.  AH  the  same  he 
concluded  the  treaty  with  Andrassy  and  stated  his  reasons 
in  a  letter  which  he  wrote  in  September  1879  to  the  then 
King  of  Bavaria : 

"  Should  no  agreement  (connection  by  aUiance)  be  arrived 
at,  Austria  could  not  be  blamed  if,  imder  the  pressure  of 
Russian  threats  and  in  uncertainty  about  Germany,  she 
finaUy  sought  a  closer  understanding  with  France  or  even 
with  Russia  herself.  Should  the  latter  occur,  Germany, 
owing  to  its  relations  with  France,  would  be  left  in  complete 
isolation  on  the  Continent.  But  should  Austria  draw 
closer  to  France  and  England  as  in  1854,  Germany  would 
be  thrown  entirely  upon  Prussia,  and,  if  she  did  not  desire 
isolation,  would  be  involved  in  the,  as  I  fear,  mistaken  and 
dangerous  methods  of  Russian  home  and  foreign  politics." 

These  words  are  stiU  true  in  essentials  to-day.  He  who 
wiU  not  think  in  terms  of  Mid-Europe,  because  the  doubts 
existing  in  1876  and  1879  have  grown  greater  instead  of 
less,  ought  to  consider  somewhat  with  which  country  an 


6o  CENTRAL  EUROPE 

alliance    can    be    entered    upon    if    we    finally    abandon 
Bismarck's  policy. 

«|C  i)C  9|C  ^  9|C  3fk 

Whilst  working  this  out  we  have  spoken  frequently,  very 
frequently  indeed,  of  Bismarck  himself,  but  for  nearly 
thirty  years  pohtics  for  us  meant  Bismarck.  As  long  as  he 
Uved  people  might  fight  for  him  or  against  him,  but  it  was 
he  who  had  the  last  word.  AU  Germany's  political  negotia- 
tions up  to  the  Great  War  are  either  a  perpetuation  of  his 
potent  influence  or  weak  attempts  to  break  away  from  it. 
He  was  a  Hercules.  The  Austrians  have  had  no  such  man, 
but  he  is  theirs  and  ours  too.  I  think  that  I  have  made  it 
clear  that  he  laid  the  foundation  of  Mid-Europe.  It  rests 
with  us  to  carry  on  the  work.  All  the  cares  which  perplexed 
him  have  been  amply  justified  by  the  Great  War !  Shall 
not  his  hopes  also  bear  fruit  ? 

It  is  true  that  after  Bismarck's  retirement  all  possible 
efforts  were  made  to  change  the  poHcy  of  the  German 
Empire.  The  Emperor  Wilhelm  II.  took,  on  occasion, 
every  conceivable  pains  to  secure  better  and  more  per- 
manent connections  with  France  and  England.  But  never- 
theless when  the  universal  tempest  broke,  Austria-Hungary 
alone  stood  at  our  side,  though  subsequently  Turkey  too 
threw  in  her  lot  with  us  both.  What  Prince  Biilow,  as 
Imperial  Chancellor,  did  by  the  "  faith  of  the  Nibelungs  "  was 
an  important  prophecy  for  Mid-Europe.  The  century's 
history  has  first  driven  us  apart  and  then  thrown  us 
together  again.  The  probation  time  of  our  interconnection 
is  over.  It  now  remains  to  build  up  our  common  future. 
What  else  in  the  world  could  we  do  in  virtue  of  our 
whole  history  ? 

If  the  German  Empire  enters  into  alliance  with  Russia  it 
means  a  return  to  the  position  of  Prussia  under  Friedrich 
Wilhelm  IV.  From  the  economic  point  of  view,  as  we  shall 
show  later,  this  may  have  certain  advantages,  but  poUtically 
it  will  be  the  death  of  our  independence.  And  the  German 
people  will  not  endure  this  permanently,  for  it  would  imply 
joint  responsibility  for  everything  Russian,  as  we  have 
already  pointed  out  in  an  earlier  paragraph. 


PREVIOUS  HISTORY  OF  CENTRAL  EUROPE   6i 

If  the  German  Empire  allies  itself  with  England,  which, 
after  this  war,  is  hardly  conceivable,  but  which  before  it 
appeared  to  be  possible,  it  will  become  the  military  partner 
of  the  first  Sea  Power,  and  must  fight  Britain's  battles  on 
the  Continent.  Such  a  position  may  have  much  in  its 
favour  commercially,  but  as  a  national  pohcy  would  bring 
to  an  end  our  individual  share  in  the  world's  history.  We 
have  already  mentioned  other  grounds  for  hesitation. 

In  both  cases  the  period  from  1870  to  1914  would  become 
a  mere  interlude  in  German  history,  an  episode  full  of 
splendour  and  self-respect,  a  brief  golden  age  such  as 
that  of  Holland.  An  individual  course  is  only  possible  to  us 
in  union  with  Austria-Hungary. 

And  how  do  matters  stand  on  the  Austro-Hungarian  side  ? 

Any  serious  attempt  to  enter  into  the  traditional  feeUng 
in  the  Danubian  monarchy  will  enable  us  to  reaUse  at  once 
that  a  binding  connection  with  the  Prusso-German  Empire 
will  be  regarded  there  as  a  very  serious  step.  For  without 
doubt  it  involves,  in  spite  of  all  the  consideration  which 
must  be  shown  to  Austria's  right  to  determine  its  own 
action,  a  bond  which  may,  under  the  circumstances,  be 
hard  to  tolerate.  To  speak  quite  frankly :  Austria  will 
be  assenting  finally  to  that  shifting  of  the  weight  of  gravity 
which  took  place  in  1866.  She  will  renounce  all  future 
claim  to  be  the  chief  ruling  Power  in  Central  Europe, 
as  she  was  in  her  ancient  days  of  splendour.  There  is  no 
formal  dependence  involved,  no  curtailing  of  sovereignty, 
no  giving  up  of  inherited  power,  but  all  the  same  there  will 
be  an  actual  acknowledgment  of  the  existing  position  of 
forces.  We  shall  speak  elsewhere  of  the  most  compHcated 
legal-constitutional  questions,  here  it  need  only  be  stated,  as 
the  result  of  previous  history,  that  a  situation  has  arisen, 
owing  to  the  founding  of  the  Empire  by  Bismarck  and  its 
justification  of  itself  in  the  Great  War,  in  which  the  German 
Empire  has  become  the  first  of  the  two  leading  States  in 
population,  mihtary  efiiciency  and  imity.  This  situation 
exists  now,  and  is  already  far  from  new,  but  all  the  same  it 
will  require  resolution  on  the  part  of  Austria  to  acknowledge 
the  fact  in  a  poUtical  arrangement. 


62  CENTRAL  EUROPE 

It  is  obvious  that  Austria-Hungary,  too,  will  examine 
all  other  possibilities  before  the  permanent  Mid-European 
union  is  decided  upon.  We  have  already  said  something 
about  this,  but  it  seems  necessary  to  reassert,  in  connection 
with  our  survey  of  past  history,  that  Austria  cannot  stand 
by  herself  in  the  world,  because  she  is  no  match  for  a 
simultaneous  attack  on  her  various  frontiers,  and  that  she 
has  no  other  natural  partner  in  alliance  except  the  German 
Empire.  A  Russian  guarantee  that  the  Austrian  State 
shall  retain  all  its  present  territories  is  absolutely  impossible 
so  long  as  the  pan-Slavonic  revolutionary  movement  is 
predominant,  and  an  English  guarantee  would  be  ineffective. 
Even  more  certain  than  the  statement  that  the  German 
Empire  needs  the  union,  is  the  converse  statement  that 
Austria-Hungary  is  bound  to  the  German  Empire  for  better 
and  for  worse.  This  is  a  fact !  If  this  alliance  is  dissolved 
the  Balkan  provinces  will  turn  towards  the  north  !  If  it  is 
dissolved  the  German-Austrians  wiU  lose  their  footing  in 
the  Dual  Monarchy  !  Austria-Hungary  may  and  indeed 
ought  to  stipulate  for  every  necessary  condition  and  safe- 
guard for  herself  in  the  union,  but  she  cannot  prevent  that 
union  even  should  she  wish  to  do  so.  Thus  speaks  past 
history,  for  Mid-Europe  arose  in  the  first  instance  out  of  the 
Prussian  victories,  and  especially  that  of  1870. 

History  of  the  past,  wonderful  chaos,  crowd  of  forms,  we 
pray  thee  lend  us  thine  aid  !  If  thou  wiUst  thou  canst 
destroy  everything  !  If  thou  willst,  thou  canst  make  every- 
thing easy  !  Come  hither,  ye  learned  counsel  of  our  historical 
Muse,  ye  interpreters  of  the  developing  fate  of  nations,  open 
your  minds  to  the  search,  so  frequently  obscured,  into  the 
genesis  of  Mid-Europe  !  Hide  nothing,  and  veil  nothing  of 
the  past,  but  make  prominent  those  things  that  are  seen  for 
the  first  time  by  those  alone  who  begin  to  muse  on  and  seek 
for  Mid-Europe  !  To-day  all  ears  are  open  to  your  words  ! 
The  nations  in  the  midst  of  the  Continent,  all  the  peoples 
between  East  and  West,  desire  to  know  their  future.  Speak 
and  we  will  hearken  ! 


CHAPTER  III 

CREEDS  AND  NATIONALITIES 

Central  Europe  is  at  the  present  time  a  geographical 
expression  which  has  so  far  acquired  no  political  or  con- 
stitutional character.  But  Austria,  too,  was  once  merely  a 
geographical  expression,  and  Prussia  was  a  provincial  term 
denoting  only  the  most  easterly  portion  of  the  kingdom.  It 
is  not  so  very  long  since  it  was  said  that  Germany  was  only 
a  geographical  concept,  and  what  a  content  this  word  has 
acquired  in  the  interval !  The  word  "  Mid-Europe,"  which 
has  not  hitherto  been  used  in  history,  has,  at  any  rate,  this 
great  advantage,  that  it  carries  with  it  no  associations  of 
creed  or  nationality,  and  consequently  does  not  from  the 
outset  awaken  feelings  of  opposition.  We  shall  have  quite 
enough  and  more  than  enough  to  do  with  such  feeUngs  of 
opposition,  for  if  ever  any  territory  on  the  inhabited  earth 
contained  within  itself  a  superfluity  of  passionate  discords 
and  frictions,  it  is  this  Central  European  coimtry  of  ours  ! 

It  may,  indeed,  be  said  that  the  more  recently  colonised 
countries,  and  especially  the  United  States  of  America, 
have  to  deal  with  intermixtures  of  opinions  and  races  of  an 
even  more  marked  and  violent  nature.  But  the  inhabitants 
of  such  countries  have  essentially  less  traditional  obstinacy. 
The  ocean  lies  between  them  and  their  old  home,  and  during 
the  long  voyage  across  they  have  made  up  their  minds  to 
accommodate  themselves  to  new  conditions.  This  ocean 
voyage  is  lacking  for  us  in  old  Europe  !  Here  it  is  not  our 
ambition  to  be  or  to  become  the  most  modem  country  in 
the  world,  but  on  the  contrary  we  are  fervently  defending 
old  rights,  old  customs  and  old  boundaries,  whether  they 
are  good  or  bad.     The  very  radicals  with  us  are  in  this 

63 


64  CENTRAL  EUROPE 

respect  often  the  most  conservative  of  all.  But  it  would 
be  an  excellent  thing  if  people  could  be  inspired  on  their 
entrance  to  Mid-Europe,  with  some  such  joyous  and  impres- 
sionable voyager's  humour,  the  cheerful  courage  of  those 
who,  after  superhuman  battles,  beUeve  more  in  the  future 
than  in  the  past.  Ill-humoured  ancestor  worship  will  never 
bring  us  to  our  goal.  We  stretch  the  hand  of  fellowship  from 
the  North  to  the  South  to  all  who  will  march  with  us  forward. 

But,  of  course,  all  objections  and  special  demands  must 
receive  attention.  Mid-Europe  can  only  come  into  being 
through  millions  of  discussions  about  the  interests  of  every 
component  group  and  tendency.  It  is  of  no  use  for  any  one 
to  think  out  a  theoretical  scheme  of  union  between  the 
countries  concerned,  and  in  doing  so  purposely  to  ignore  all 
rehgious  and  national  difficulties.  Let  us  agree  at  the 
outset,  that  if  any  one  be  so  "  enlightened  "  as  to  have  lost 
all  his  own  natural  colour,  he  still  cannot  deny  or  mistake 
the  force  of  innate  and  inherited  traits  of  character  without 
making  himself  ridiculous.  Churches  may  mean  nothing  to 
him,  yet  all  the  same  they  are  realities.  He  may  be  a  mere 
railway  traveller  without  country,  but  nevertheless  those 
who  cultivate  the  soil  from  north-west  to  south-east,  those 
who  dwell  in  towns,  large  and  small,  those  who  tend  vine- 
yards, those  who  work  in  mines,  have  all  their  own  insuper- 
able mass  of  peculiarities.  Our  Central  European  wealth 
and  vigour,  as  also  our  daily  political  and  social  difficulties, 
consist  in  an  incredible  and  disquieting  abundance  of 
characteristic  forms. 

I  have  visited  most  parts  of  the  Central  European  country, 
and  am  familiar  with  people  from  every  district.  Shall  I 
picture  them  all  to  myself  ?  Then  in  thought  I  am  in  a 
peasant's  cottage  in  Lower  Germany,  in  a  country  house  in 
Upper  Germany,  in  an  Alpine  inn,  in  a  little  town  in  Bohemia, 
in  the  industrial  region  in  Upper  Silesia,  in  a  shop  in  Posen, 
in  an  hotel  in  Tatra,  with  friends  in  Budapest,  at  the  port 
at  Triest,  at  home  in  BerUn,  in  the  splendid  old  cathedral  of 
St.  Stephen  in  Vienna,  in  the  silence  of  the  Bohmerwald, 
on  the  shore  at  Riigen  ;   and  so  on  continually  forms  arise 


CREEDS  AND  NATIONALITIES  65 

of  men,  women  and  children,  and  I  hear  every  German 
accent,  from  the  broad  Frisian  Plattdeutsch  to  the  Tyrolean 
Moimtain  German,  from  the  softness  of  the  Lower  Rhine  to 
the  sharpness  of  East  Prussia,  from  the  Mecklenburg  calm 
to  the  Viennese  Uveliness,  and  in  addition  there  is  the 
sound  of  Danish  in  the  North,  French  in  the  West,  Italian 
and  Croatian  in  the  South,  Tzechish  in  Bohemia,  Magyar, 
Roumanian  and  Polish  in  the  South-East  and  East.     The 
whole  is  alive  Hke  a  mighty  forest  with  tall  trees  and  under- 
growth,  with  evergreens   and  fir-copses   and   a  thousand 
small  bushes  and  flowers.     It  is  hke  a  sea  in  which  all  kinds 
of  fish   disport   themselves.     And  nowhere   are   Umits   or 
divisions  sharply  fixed.     All  is  in  flux,  pushing  and  pressing 
in  confusion,  whispering  and  shouting,  pleading  and  scold- 
ing, pra5dng  and  calculating.     Unless  all  these  people  are 
wiUing,  the  Archangel  Michael  himself  cannot  mould  them 
into  his  heavenly  legion.     To  reduce  this  crowd  to  political 
efficiency,  to  produce  from  it  an  army  and  to  make  it  a 
vigorous,  united,  organic  State — this  is  something  almost 
superhuman  and  at  the  same  time  splendid,  a  task  for  the 
ablest  of  statesmen,  who  possess  the  soul  of   the  nations, 
and  whose  thoughts  are  guided  by  the  spirit  of  history.     He 
who  takes  up  this  work  must  have  nothing  petty  about 
him,  and  must  excel  in  will,  in  power,  in  goodness  and  in 
patience.     For  this  work  we  want  to  summon  our  best  men 
and  women  from  all  parts  of  Central  Europe,  or  rather  we 
want  to  express  the  summons  to  them  in  the  words  which 
Providence  addresses  to  all  of  us  in  this  war :    Become  a 
united  people  !    Remain  united  after  such  terrible  slaughter ! 
««*«*«■ 
In  government  there  is  a  conservative  type  of  forbearance 
and  a  Uberal  type  of  forbearance,  and  the  two  must  co- 
operate in  the  genesis  of  Mid-Europe.    The  conservative 
forbearance  has  sympathy  with  what  has  been.     The  Hberal 
forbearance  pleads  for  freedom  of  movement  for  what  is 
striving  to  be.     We  must  learn  better  than  before  to  separate 
off  that  coercion  and  law  which  are  State  necessities,  from 
.those  things  in  which  free  play  may  be  allowed  to  individual 


66  CENTRAL  EUROPE 

tendencies.  As  the  maxim  puts  it :  in  necessariis  unitas,  in 
dubiis  libertas,  in  omnibus  caritas  =:in  the  requirements  of 
State,  coercion  and  equality ;  in  personal  matters,  freedom  ; 
in  both,  comradeship !  The  powers  of  the  State  confedera- 
tion, of  the  States,  of  the  subordinate  States,  of  the  Circles,  of 
the  Communes,  of  the  geographical  districts,  of  the  national 
communities,  of  the  religious  associations,  of  the  economic 
organisations,  workmen's  societies,  trade  unions,  learned 
societies,  parties,  must  be  flexibly  graduated,  so  that  Mid- 
Europe,  with  perfected  organisation,  may  be  the  spacious 
home  of  free  movement.  AU  abilities  now  employed  in  the 
leadership  of  State  and  commune  in  North  Germany,  South 
Germany,  Austria  and  Hungary  must  be  combined  together, 
so  that  a  tradition  may  be  formed,  which  will  perpetuate 
itself  with  ever  fresh  vitality,  and  will  carry  on  amongst 
our  children  and  grandchildren  the  work  that  we  are 
beginning  with  hesitation  and  effort. 

Central  Europe  can  be  treated  neither  as  barracks  nor 
cloister,  neither  as  pubhc  meeting  nor  as  factory,  neither 
as  farmhouse  nor  as  suburb,  neither  as  bank  nor  as  work- 
shop, but  all  must  have  a  place  therein  :  discipUne  and 
independence,  threats  and  rewards.  We  need  to  ponder 
over  this,  for  it  will  not  come  about  of  itself.  We  must 
raise  the  character  of  the  peoples  by  our  directing  reason. 

And  what  is  the  object  of  it  ? 

The  history  of  the  evolution  of  nations  shows  us  a  develop- 
ment of  human  types  which  is  the  result  of  many  centuries. 
We  know  what  is  meant  by  an  Italian,  a  Frenchman,  an 
Englishman,  a  Russian,  an  American.  We  know  also  what 
is  meant  by  a  German,  a  Magyar,  a  Pole,  a  Tzech.  But 
our  Mid-European  type  is  not  yet  fully  developed,  he  is  still 
in  process  of  formation.  Frenchmen  and  Englishmen  are 
complete  after  their  kind,  but  we  Germans  and  the  smaller 
nations  surrounding  us  have  not  at  present  acquired 
that  degree  of  assurance  in  the  conduct  of  life  and  in  tact, 
nor  that  political  training  and  aesthetic  habit,  -which  would 
suffice  of  themselves  to  guide  us  in  matters  great  and  small. 
In  comparison  with  the  two  western  nations  we  are  still 


CREEDS  AND  NATIONALITIES  67 

young.  When  the  French  had  already  hved  through  the 
most  splendid  period  of  their  monarchy  we  were  just 
beginning  to  imitate  Romance  culture.  Our  forefathers 
learnt  French  and  went  to  Paris  in  order  to  find  out  there 
how  to  behave  and  how  to  dress  and  what  constituted  good 
tone.  From  the  English  we  borrowed  sport,  habits  of 
travelHng,  town-planning  and  many  other  such  things.  We 
are  still  not  quite  out  of  our  schooldays.  To  confess  this 
calmly  is  no  shame,  even  in  war  time.  We  possess,  it  is 
true,  old  and  honourable  traditions  and  primitive  elements 
of  temper  and  character,  and  in  addition  many  an  efficient 
and  long-used  method,  and  many  a  new  invention.  But 
old  and  new,  primitive,  mediaeval  and  modem,  are  still 
unbalanced.  We  are,  if  I  may  so  express  it,  historically  a 
half-finished  product,  and  we  are  stUl  awaiting  the  day  of 
completion.  This  gives  us  a  touch  of  the  primitive  and  of 
something  stiU  capable  of  improvement.  I  should  not 
choose  to  be  occupied  with  any  other  human  situation  than 
this  one,  because  it  involves  such  wonderful  problems.  We 
have  much  background  and  many  good  qualities,  we  have 
also  ability  to  work  our  way  through,  but  now  our  high 
school  period  ought  to  begin.  Round  and  about  the  German 
spirit  will  grow  up  a  Mid-European  culture  ;  there  will 
develop  a  human  type  which  will  be  intermediate  between 
Frenchmen,  Italians,  Turks,  Russians,  Scandinavians  and 
Englishmen.  Let  us  search  out  these  Mid-Europeans ! 
But  indeed  it  is  difficult  for  us  just  because  we  are  in  Mid- 
Europe  :  in  the  land  of  passage  for  all  the  migrations  of  the 
peoples,  in  the  battlefield  of  all  the  great  intellectual 
struggles,  in  the  region  of  religious  wars,  of  fights  about 
nationality,  of  an  endless  succession  of  economic  periods,  in 
a  region  which  neither  affords  nor  can  possess  inward  ease 
because  it  is  too  full  for  mere  classification.  Taking  the 
region  as  a  whole  we  are  too  much  occupied  with  futile 
efforts,  and  frequently  even  full  of  despair  about  things  in 
particular,  but  nevertheless  we  have  plenty  of  optimism 
about  things  in  general.  We  are  famihar  with  the  despair 
of  those  who  do  not  gain  their  victory,  and  with  the  optimism 


68  CENTRAL  EUROPE 

of  those  who  take  up  the  old  problems  afresh.  Let  us,  in 
this  mood,  speak  in  the  first  place  of  the  old  and  still 
influential  religious  struggles  of  Central  Europe,  of  the  many 
attempts,  doubts,  broodings,  advances,  falls,  of  suffering  and 
death,  and  the  song  of  the  holy  angels. 

****** 
From  ancient  times  onwards,  Central  Europe  was  an 
object  of  dispute  between  the  two  portions  of  the  old  Roman 
Empire.  To  express  it  otherwise :  the  greater  part  of 
Central  Europe,  since  it  was  Christianised  and  civilised,  was 
fundamentally  dependent  upon  ancient  Rome,  the  immortal 
Italian  capital  of  the  material  and  spiritual  world.  But  in 
the  Carpathian  districts  and  on  the  Lower  Danube  there 
was  always  an  ebb  and  flow  of  Byzantine  influence.  The 
pre-Turkish  orthodox  Rome  of  the  East  attempted  as 
occasion  offered  to  gain  a  footing  amongst  the  Magyars  and 
Bohemians  as  well  as  amongst  the  Poles.  But  Constanti- 
nople made  its  furthest  thrusts  to  the  north-west  when  it 
was  Turkish  and  Mohammedan.  The  Turks  were  twice 
before  Vienna,  they  had  possession  of  Graz  and  Istria  and 
advanced  on  the  other  side  as  far  as  Galicia,  they  conquered 
Lemberg  and  Przemysl  and  galloped  over  the  Carpathian 
passes  which  now  again  have  been  the  scene  of  our  battles. 
They  imposed  upon  the  conquered  peoples  an  often  oppres- 
sive system  of  political  and  military  suzerainty  and  of 
taxation,  but  did  not  enjoin  their  conversion  to  Moham- 
medanism. Hence,  even  under  Turkish  rule,  the  earlier 
spiritual  connections  with  the  Eastern  and  the  Western 
Rome  continued  within  approximately  the  same  geographical 
Umits.  In  course  of  time,  by  material  and  spiritual  means. 
Western  Rome  pressed  its  eastern  boundary  far  forward  up 
to  the  Vistula.  Eastern  Rome  receded  towards  the  east 
and  south.  To-day  Mohammedan  districts  are  found  only 
in  Bosnia  and  Herzegowina ;  there  are  Eastern  Orthodox 
Christians  in  Serbia  and  on  the  borders  of  Dalmatia,  Croatia, 
Slavonia,  and  especially  in  the  Roumanian  districts  at  the 
junction  of  the  Theiss  and  the  Danube,  round  Siebenbiirgen 
and  in  the  Bukowina.     A  section  of  the  Roumanians  and 


CREEDS  AND  NATIONALITIES  69 

almost  all  the  Austrian  and  Hungarian  Ruthenians  on  both 
sides  of  the  Carpathians  are  Greek-Catholics,  that  is,  their 
religion  is  Byzantine  in  origin  but  Roman  and  papal  in 
organisation.  But  all  the  rest  has  been  a  part  of  the  per- 
manent whole  adhering  to  Western  Rome  since  mediaeval 
times,  and  hence  it  experiences  all  the  powerful  inner 
convulsions  of  this  great  spiritual  community, 

****** 
The  separatist  movement  away  from  Western  Rome, 
which  began  with  the  Cathari,  the  Waldensians,  the 
Wicklifites  and  the  Hussites,  and  reached  its  climax  in  the 
German  and  Swiss  Reformation,  was  hved  through  in  the 
German-Slav-Hungarian  districts  of  Central  Europe  with 
terrible  force  and  counter-force.  The  violent  and  injurious 
struggle  raged  on  from  15 17  until  the  Peace  of  Westphalia, 
and  disturbed  the  organisation  and  well-being  of  the  mediaeval 
State  almost  to  the  point  of  destruction.  On  and  around 
German  soil  a  volcanic  spiritual  experience  was  consum- 
mated, the  results  of  which  were  felt  universally  wherever 
there  were  children  of  distant  Rome  ;  but  those  who  were  the 
earliest  forerunners  of  the  movement  often  thereby  sacrificed 
themselves  and  their  country.  People's  hearts  were  in  a 
state  of  ferment.  Nearly  all  the  territories  which  now 
belong  to  Germany,  Austria,  Hungary  and  to  what  was 
once  the  Kingdom  of  Poland,  were  first  gripped  by  the  new 
teaching,  then  again  reconquered,  and  often  changed  their 
ruler  and  their  faith  many  times  over,  until  at  last,  after 
much  bloodshed,  the  spirit  and  the  abiHty  to  resist  were 
exhausted  and  creeds  were  regulated  according  to  authority 
and  normal  conditions.  All  these  immense  struggles  in 
nearly  every  town,  borough,  county,  diocese  and  electorate 
have  become  of  necessity  almost  incomprehensible  to  our 
present  generation  of  men.  In  the  interval  we  have  gained 
something  which  four  hundred  years  ago,  at  the  close  of  an 
epoch  in  the  world's  history,  the  most  enlightened  intellects 
hardly  dared  to  think  out.  And  this  something  is  the 
personal  freedom  of  the  individual  from  the  enforced 
bondage  of  rehgious  opinion.     This  freedom  of  the  individual 


70  CENTRAL  EUROPE 

appears  as  a  result  of  the  Reformation,  but  at  first  both 
the  German  and  the  Swiss  Reformation  were,  according  to 
their  own  intention,  only  a  transition  from  the  old  universal 
community  of  church  life  and  affairs  to  a  new  and  special 
territorial  one.  Even  Luther  and  Calvin  desired  coercion, 
and  insisted  on  the  axiom  :  cuius  regio,  eius  religio  :  the 
ruler  determines  the  faith  !  The  age  of  constraint  required 
fixed  forms  and  discipUne  of  the  inmost  soul.  This  had  not 
been  £0  in  the  later  days  of  the  old  Roman  Empire,  but  as 
soon  as  the  Romish  faith  became  in  the  North  a  missionary 
religion  and  a  religion  of  the  masses,  and  especially  after  it 
penetrated  to  the  German  Franks,  it  became  a  constituent 
part  of  public  life.  Out  of  that  wonderfuUy  free,  lawless, 
spiritual  and  personal  Sermon  on  the  Mount  there  developed 
a  sort  of  spiritual  militarism,  without  which  no  social  or  civic 
order  seemed  possible.  Thus  Luther  and  Zwingli  did  not 
wish  to  infringe  upon  discipUne  as  such,  but  to  mould  their 
spirit  again  more  closely  to  the  BibUcal  model  and  to 
advance  personal  piety  and  individual  experience  in  religion. 
This  constituted  their  sacred  task,  which  seemed  like  pre 
sumption,  insubordination  and  a  misleading  of  the  people 
to  the  representatives  of  the  ancient  and  long-since  syste- 
matised  community  of  souls. 

This  account  of  the  Reformation  movement  in  the  Church 
may  seem  superfluous  here,  but  I  am  anxious  that  we  in 
Central  Europe  should  get  a  grasp  of  history  in  which 
Catholic  and  Protestant  are  conceived  of  as  constituent 
parts  of  a  joint  past  without  surrender  of  their  spiritual 
value  and  reputation.  For  it  cannot  be  denied  that  the 
union  of  North  and  South  may  be  attended  by  a  passionate 
outburst  of  feeling  in  this  very  sphere  of  religion.  In  its 
religious  evolution  North  Germany  has,  as  a  rule,  conducted 
itself  differently  from  Austria ;  and  Austria,  Bohemia  and 
Poland  have  again  behaved  differently  from  Hungary ; 
consequently  everywhere  remnants  of  bitterness  have  per- 
sisted which  may  be  reawakened  at  the  slightest  provoca- 
tion. Almost  the  whole  of  North  and  some  important 
parts  of  South  Germany  have  gone  over  to  the  Protestant 


CREEDS  AND  NATIONALITIES  71 

established  Church,  whilst  the  counter-Reformation,  the 
forcible  suppression  of  the  new  form  of  faith,  was  most 
violent  in  the  Hapsburg  territories.  There,  under  King 
Ferdinand  L,  the  Jesuit  Canisius,  called  by  some  the 
"  Hammer  of  heretics,"  and  by  others  the  "  second  Apostle 
of  Germany,"  carried  on  his  work.  From  thence  at  various 
times  Protestants  migrated  from  house  and  home,  and 
numbers  of  these  were  taken  in  by  the  Prussian  rulers.  The 
result  of  this  is  that  the  Protestants  of  the  German  Empire 
often  still  have  a  conception  of  the  violence  of  the  Austrian 
CathoUcs,  whilst  the  pious  Austrian  Catholics  have  a  horror 
of  Prussian  godlessness  and  denial  of  everything  sacred. 
Any  one  who  travels  in  the  Tyrol  and  goes  to  church  on 
Sundays  will  hear  something  of  this.  This  division  in 
opinion  gives  a  sharper  character  to  the  struggles  for  poUtical 
power  between  North  and  South,  and  thoughtful  people 
are  apt  to  ask  themselves  what  spiritual  and  religious 
consequences  a  closer  union  may  have  for  both  parties. 
»♦♦♦«» 
This  type  of  question  is  not  new.  In  the  middle  of  last 
century,  when  the  "  Greater  Germany "  party  separated 
from  the  "  Lesser  Germany  "  party,  the  factor  of  creed, 
whether  expressed  or  unexpressed,  had  its  share  in  the 
matter.  And  von  Treitschke,  Bismarck's  historian  of  the 
new  German  Empire,  traced  an  almost  direct  connection 
between  Wittenberg  and  Berhn,  between  Luther  and 
Bismarck,  when  he  wrote  his  account  of  the  previous 
history  of  the  founding  of  the  Empire.  Luther  intro- 
duced German  Christianity  and  this  led  by  way  of  the 
great  Elector  Friedrich  II.,  Kant  and  Hegel,  to  the  German 
Empire.  To  us,  who  have  grown  up  with  this  point  of 
view,  it  seems  so  evident  that  we  find  it  difficult  to  realise 
how  strange  it  must  appear  to  the  CathoUcs  even  in  the 
German  Empire.  No  doubt  there  is  in  fact  much  truth  in 
it,  for  the  devotion  to  the  State  which  characterised  the 
Prussians  was  of  no  Catholic  growth  ;  but  this  way  of  putting 
it  is  inadequate  as  a  complete  explanation  of  the  German 
Empire.     The  Empire  is  by  no  means  merely  the  outcome 


72  CENTRAL  EUROPE 

of  the  Konigsberg  influence  of  Kant,  and  moreover  it  is 
only  in  a  strictly  limited  sense  that  King  Friedrich  II. 
can  be  regarded  as  a  Protestant  Christian.  But,  above  all, 
this  purely  Protestant  presentation  of  history,  whether  it  be 
true  or  not,  cannot  be  persisted  in  as  a  primary  Imperial 
tradition  since  aU  parties  have  given  up  the  Kulturkampf 
and  it  must  not  and  will  not  be  reawakened.  When 
Bismarck's  Empire  made  its  peace  with  the  Pope  and  the 
Party  of  the  Centre,  the  Protestant  character  of  the  Hohen- 
zoUem  Emperors  became  an  imofiicial  private  affair  of  those 
who,  as  wearers  of  the  crown,  were  above  creeds.  From 
that  time  onwards  the  German  Empire,  as  such,  has  had  no 
special  creed,  and  it  can  have  none  after  the  union. 

Thus  whilst  at  one  time  the  Prussia  of  Friedrich  the  Great 
was  honoured  as  the  "  leading  Protestant  Power,"  Austria 
was  regarded  as  the  political  embodiment  of  the  Papacy  and 
the  Jesuit  Order.  In  contrast  to  the  freethinker  Friedrich  II., 
his  great  opponent  Maria  Theresa,  splendid  in  her  austere 
and  harsh  devotion  to  the  Church,  appears  as  the  founder  of  a 
State  Church  system  which  has  not  yet  entirely  disappeared, 
and  under  which  the  Protestant  minority  in  Austria,  whether 
German  or  Slav,  has  much  to  endure.  But  this  point  of 
view  too,  however  correct  as  a  whole,  certainly  admits  of 
exaggeration,  for  this  same  Maria  Theresa  sent  Protestant 
colonists,  both  Lutherans  and  Calvinists,  to  GaUcia  and 
elsewhere,  and  was  more  gracious  to  them  than  many  later 
sovereigns. 

But  the  essential  thing  is  that  in  a  partnership  between 
Germany  and  Austria-Hungary  the  German,  and  with  them 
the  Hungarian,  Protestants  would  be  in  the  minority.  This 
weighs  heavily  upon  the  minds  of  some  Protestants,  however 
well  they  appreciate  the  historical  and  political  necessity  for 
the  union.  They  argue  somewhat  in  this  way  :  "Of  course 
the  union  will  not  directly  change  anything  in  the  existing 
position  of  the  religious  creeds  ;  nor  is  it  likely  that  pro- 
vincial administrations  which  have  hitherto  been  Protestant 
would  be  induced  thereby  to  adopt  another  religious  policy, 
but  the  closer  the  Central  European  union  became  in  course 


CREEDS  AND  NATIONALITIES  73 

of  time,  the  greater  would  be  the  danger  for  us  Protestants 
of  becoming,  so  to  speak,  historically  unrepresented.  For 
a  papal  party  might  easily  be  formed  which  would  engross 
the  whole  of  Mid-Europe  and  would  secure  religious  privileges 
in  different  States  in  exchange  for  international  or  com- 
mercial activities,  and  which  would  give  Germans  a  Catholic 
instead  of  a  Protestant  character  in  the  eyes  of  foreigners." 
People  are  even  heard  to  say  that  in  the  united  Empire  the 
Protestants  would  be  treated  somewhat  as  they  now  are  in 
Bavaria,  that  is,  not  injured  but  pushed  aside. 

I  too  acknowledge  that  my  historical  mode  of  thought 
leaves  me  in  some  anxiety  in  this  respect,  and  all  the  more 
because  the  war  has  greatly  weakened  the  bond  between 
Protestant  England  and  Germany,  and  we  cannot  tell 
whether  or  no  feUow-feeling  between  the  German,  English 
and  American  Protestants  will  be  quickly  revived.  It  is 
true  that  no  organisation  has  been  broken  up  in  this  con- 
nection, since  none  existed,  but  any  one  who  knows  Protes- 
tantism is  aware  how  littie  it  depends  upon  its  organisations 
and  how  much  upon  informal  fellow-feeUng.  Protestantism 
is  weak  as  a  Church,  but  strong  as  a  union  of  convictions. 
Protestants  recognise  each  other  as  such  all  over  the  world, 
but — will  they  so  recognise  one  another  again  during  the 
next  decades  ?  The  war  injures  us  Protestants  more  than 
the  Catholics,  for  the  papal  centre,  in  spite  of  its  geographical 
position  in  Italy,  has  remained  outside  the  war  owing  to 
the  behaviour  of  the  present  Pope.  Amongst  us,  Protestant 
neutrals  do  indeed  try  to  preserve  the  Protestant  com- 
munity, but  they  are  not  sufficiently  powerful  since  they 
themselves  formerly  derived  most  of  their  spiritual  guidance 
from  Germany  and  England.  Hence,  when  we  are  concerned 
about  the  future  of  Protestantism  as  a  whole  and  its  mis- 
sionary work  in  foreign  parts,  it  is  no  very  simple  matter  to 
be  obliged  at  the  same  time  to  enter  upon  an  intimate  and 
indissoluble  union  with  a  Power  which  is  Catholic  both  in 
theory  and  practice.  We  are  forced  to  it  by  all  the  indepen- 
dent reasons  that  have  been  adduced,  but  we  may  be  allowed 
to  state  frankly  that  it  involves  for  us  a  definite  sacrifice 


74  CENTRAL  EUROPE 

from  the  religious  point  of  view.  Others  will  have  different 
sacrifices  to  make,  as  is  unavoidable  in  concluding  an 
alliance. 

9|c  4:  4c  4c  :((  )|c 

The  considerations  which  make  it  difficult  in  some  degree 
for  us  as  Protestants  to  set  our  faces  towards  Mid-Europe 
will  in  the  same  degree  render  the  transition  easier  for  the 
Catholics.  But  here,  too,  things  are  less  simple  than  may 
appear  from  a  merely  statistical  point  of  view.  The  Central 
European  Catholics  are  far  from  forming  a  completely 
united  body.  They  are  united  before  the  papal  chair,  but 
not  always  with  one  another.  It  is  much  easier  to  combine 
the  Protestant  minorities  in  Austria  and  Hungary  with  us 
than  to  mould  the  Catholics  of  the  German  Empire  into  a 
unity  with  the  Austro-Hungarian  Catholics  of  every  tongue. 
To  mention  one  important  point,  the  Catholic  clergy  in 
Hungary  have  been  an  independent  body  since  ancient 
times  and  are  not  political  in  the  same  sense  as  the  Viennese 
Christian  Socialists  or  the  Cologne  and  Berlin  leaders  of  the 
Centre.  In  Hungary  the  almost  Calvinistic  Protestantism 
of  many  leading  famihes  is  actually  of  much  more  importance 
than  appears  from  statistics  alone.  Moreover  the  strong 
Jewish  element  among  the  educated  classes  helps  to  safe- 
guard the  Hungarian  kingdom  from  reUgious  parties.  Cer- 
tain attempts  have  been  made  at  a  clerical  policy  but  with 
Uttle  result.  In  the  Polish  districts  of  Austria,  however, 
the  Catholic  clergy,  Hke  those  in  Prussian  Poland,  are 
Polish  Nationalists  rather  than  universal  Catholics  or 
political  Central  Europeans,  and  go  their  own  way.  The 
same  thing  is  notoriously  true  of  Croatian,  and  especially  of 
Southern  Slav  Catholicism,  and  indeed  of  the  Tzechs  as 
well.  They  are  certainly  not  all  adjusted  at  present  to  any 
notion  of  a  Central  European  Great  Power,  and  it  wiU  be 
a  good  time  before  they  are.  Besides  the  German  Centre 
has  passed  through  a  lengthy  schooUng,  from  which  it  has 
learnt  that  excess  in  one  case  leads  to  opposition  in  others. 
This  is  perhaps  not  always  noticeable  in  the  campaign 
speeches  made  by  either  party,  but  it  is  quite  evident  in 


CREEDS  AND  NATIONALITIES  75 

parliamentary  tactics.  And  we  must  not  forget  that  there 
are  no  small  number  of  Cathohcs  in  Austria  and  Hungary 
who  trouble  themselves  very  httle  about  their  Catholicism  ! 

It  must,  of  course,  be  understood  from  the  outset,  and 
indeed  neither  side  could  conceive  of  anything  else,  that 
Church  and  school  questions  wiU  never,  and  must  never, 
become  the  concern  of  the  Central  European  union.  Any 
possible  influence  on  reUgious  creeds  arising  out  of  the 
union  can  only  be  quite  indirect,  and  will,  as  we  hope,  be 
balanced  by  the  increasing  political  fellow-feeling  amongst 
the  united  nations.  The  more  Mid-Europe  takes  shape,  the 
further  we  recede  from  the  age  of  reUgious  wars  and  the 
nearer  we  approach  to  the  toleration  which  wishes  to  live, 
and  to  let  others  live,  in  freedom  from  political  coercion  in 
those  very  matters  which  are  the  highest  and  the  most  sacred. 

I  hear  that  some  people  cherish  the  idea  that  the  poUtical 
union  may  be  used  in  order  to  revive  old  and  futile  hopes  of 
religious  agreement.  This  is  well  intentioned  but  dangerous. 
Peace  is  most  lasting  in  this  sphere  when  it  is  not  too  much 
talked  about.  And  truly  we  have  plenty  of  other  things 
to  do  at  present ! 

At  this  point,  between  our  discussion  of  creeds  and  that 
of  nationalities,  we  must  say  something  about  the  Central 
European  Jews.  In  the  German  Empire  they  are  regarded  as 
a  religious  sect  and  lay  stress  upon  their  German  nationahty. 
In  the  Danubian  Monarchy  the  matter  is  much  more  compli- 
cated, for  here  there  are  not  only  German  Jews,  but  also 
Polish,  Tzechish  and  Hungarian  Jews,  and  they  often  take 
their  place  as  a  separate  people  in  the  mixture  of  nationalities, 
and  do  not  first  combine  with  any  of  the  existing  race- 
groups.  If  a  Jew  from  Galicia  emigrates  to  Vienna,  that 
does  not  always  mean  that  he  becomes  German.  Moreover, 
the  Jews  in  the  eastern  districts  in  Austria  and  in  parts  of 
Hungary  live  much  more  closely  together,  and  in  a  more 
tribal  manner ;  they  are  hke  a  special  caste  with  their  own 
customs,  occupations  and  language,  and  do  not  combine  at 
all  with  the  rest  of  the  mixed  population.     In  the  long 


76  CENTRAL  EUROPE 

register  of  Austrian  political  parties  the  "  Jewish  Club  "  even 
figures  as  a  small  party  group,  whilst  of  course  Jews  appear 
in  addition  in  almost  all  the  other  parties.  There  are  quite 
a  number  of  fair-sized  towns  in  which  the  Jews  number 
more  than  50  per  cent,  of  the  population,  and  thus  have 
direct  control  of  the  administration.  We  give  the  following 
places  as  examples  :  Rzeszow,  Rawaruska,  Brody,  Zloczow, 
Tamopol,  Rohatyn,  Stanislau,  Kolomea  (all  in  GaHcia),  and 
Munkacs  in  Hungary.  The  stabihty  and  influence  of  the 
Jews  in  the  capital  towns  Vienna,  Prague  and  Cracow 
are,  as  in  Amsterdam  and  Frankfurt-on-Main,  much 
greater  than  in  Berlin  and  Breslau.  In  Budapest  the 
proportions  existing  in  Warsaw,  Odessa  and  Lodz  are 
almost  reached.  Hence  it  would  be  a  serious  mistake  to 
leave  the  Jews  out  of  account  in  making  schemes  for  Mid- 
Europe.  They  are  there,  and  have  great  influence  on 
newspapers,  on  economic  Ufe  and  on  politics.  On  the  whole 
we  may  assume  that  in  the  west  they  can  be  won  over  to 
support  the  extension  of  the  economic  area  by  the  creation 
of  a  Central  European  economic  unity.  Of  the  views  of  the 
Jews  in  Galicia  I  can  form  no  opinion  of  my  own,  especially 
now  when,  like  all  the  inhabitants  of  Galicia,  they  have  had 
to  endure  the  harsh  and  perplexing  influence  of  this  terrible 
war. 

It  is  conceivable  that  the  high  percentage  of  Jews  in  the 
Danubian  Monarchy  may  be  advanced  by  the  Anti-Semitic 
party  in  the  German  Empire  as  an  argument  against  the 
foundation  of  Mid-Europe  ;  conceivable  but  not  certain,  for 
the  same  party  are  wont  to  be  very  good  friends  with  the 
Germans  in  Austria,  who  are  in  part  inclined  to  Anti- 
Semitism,  and  would  wiUingly  work  with  them.  But  their 
anti-semitic  efforts  would  probably  have  no  political  result, 
especially  since  the  Jewish  soldiers,  both  in  the  German  and 
in  the  Austrian  and  Hungarian  armies,  have  done  their 
duty  during  the  war  Uke  every  one  else,  and  like  others 
have  in  many  cases  ratified  their  citizenship  by  death. 
After  the  war  there  must  be  an  end  to  every  form  of  mutual 
irritation,    for   the   trenches   jointly   held   will   he   in   the 


CREEDS  AND  NATIONALITIES  77 

background.     These  will  be  worth  as  much  politically  as 

baptism. 

****** 

And  thus  we  have  arrived  at  the  problems  of  nationality 
themselves.  The  Jewish  question  is  more  of  a  social  than 
a  national  question  in  the  stricter  sense  of  the  word,  for 
nowhere  in  Central  Europe  do  the  Jews  as  such  wish  to 
appear  as  forming  a  State.  The  Zionist  party  may  under- 
stand Judaism  as  a  whole  as  constituting  a  political  power 
within  international  politics,  and  may  seek  in  Palestine  for 
a  centre  for  combined  Jewish  influence,  but  all  the  same 
this  only  affects  very  indirectly  the  internal  situation  of  the 
Great  Central  European  States.  We  can  and  will  take 
these  international  phenomena  into  account  in  our  political 
calculations  when  we  are  considering  the  Turkish  Orient, 
and  perhaps  also  when  we  remember  the  western  districts 
of  Russia.  But  there  are  no  questions  of  Jewish  language. 
Government  and  party  on  a  grand  scale,  either  in  the 
German  Empire  or  in  Austria-Himgary.  It  is  all  local  and 
highly  provincial.  All  that  the  Jew  here  demands,  and 
with  justice,  is  recognition  as  a  citizen,  nothing  more !  It 
is  his  affair  in  which  national  group  he  seeks  this  recognition. 
But  sections  of  nations  which  have  in  their  neighbourhood 
greater  political  State  entities  of  their  own  race,  or  which 
compare  in  memory  a  brilliant  political  past  with  a  dismal 
present,  wiU  not  be  satisfied  with  this  more  passive  citizen- 
ship. They  aspire  to  union  as  a  State,  and  even  assured 
advantageous  material  conditions  are  no  adequate  com- 
pensation to  them  for  an  historical  independence  which  has 
either  been  lost  or  never  attained. 

All  the  great  European  States,  and  even  some  of  the 
small  States,  have  to  struggle  with  national  difficulties  of 
this  kind.  They  have  been  overcome  most  completely  in 
the  Latin  countries  of  Italy,  Spain  and  France,  because 
here  the  old  language  of  the  rulers  has  so  far  supplanted  the 
remnants  of  the  popular  tongue  that  the  latter  only  survives 
in  provincial  dialects,  and  is  inadequate  to  any  effective 
organisation.     It  is  different  with  the  Irish  in  Great  Britain 


78  CENTRAL  EUROPE 

and  with  the  Flemish  in  Belgium.  But  the  headquarters  of 
the  racial  problems  is  situated  where  Central  Europe  passes 
over  into  the  broad  Russian  plains,  on  the  Baltic,  on  the 
Vistula,  in  the  Carpathians,  and  on  the  Danube  as  far  as 
the  Golden  Horn  of  Constantinople.  And  the  centre  of  all 
these  problems  at  the  present  time  is  the  Austro-Hungarian 
Monarchy,  the  "  country  of  nations." 

We  Germans  of  the  Empire  have  less  to  do  with  these 
troubles,  and  consequently  amongst  us  there  is  generally 
very  little  genuine  understanding  of  them,  and  Mttle  desire 
to  go  into  them  seriously  and  systematically.  We  have,  or 
had  hitherto,  our  boimdary  difficulties  in  Alsace-Lorraine 
and  on  the  Danish  borders,  but  here  there  was  only  a  small 
minority  in  question,  so  that  people  thought  that  matters 
could  be  arranged  by  administrative  methods,  and  regarded 
the  resistance  that  showed  itself  as  an  unjustifiable  opposi- 
tion. In  these  two  places  a  great  deal  that  was  mean  and  of 
which  we  are  ashamed  has  been  done  in  the  name  of  Ger- 
manism, but  the  German  people  as  a  whole  have  troubled 
themselves  little  about  the  matter.  They  have  hardly 
noticed  the  varying  experiments  on  the  hve  bodies  of  these 
small  groups,  and  have  considered  the  authorities  concerned 
well  able  to  decide  what  would  make  for  national  safety. 
Now,  during  the  war,  many  are  beginning  to  form  their  own 
opinions,  but  they  often  start  with  the  most  elementary 
scheme — forcible  Germanisation — knowing  very  little  of  the 
many  gloomy  experiences  which  have  already  resulted  from 
this  method  all  over  the  world,  a  method  still  possible  in 
Russia  but  already  become  impracticable  in  the  Vosges  and 
Jutland.  Suppose,  for  example,  that  people  were  forbidden 
to  speak  French  in  the  square  at  Colmar,  such  a  decree, 
even  in  war  time,  would  be  simply  impracticable,  even 
ludicrous  in  its  ineffectiveness.  To  win  over  a  foreign- 
speaking  section  of  the  population  to  be  citizens  of  a  national 
State  with  a  different  language  is  too  complicated  a  matter 
1o  be  successfully  settled  by  some  prohibitions  and  the 
removal  of  a  few  leaders.  During  the  war  rapid  military 
measures  may  often  be  unavoidable,  but  if  we  intend,  when 


CREEDS  AND  NATIONALITIES  79 

peace  comes,  to  make  any  change  in  the  constitution  of  the 
Reichsland  or  to  incorporate  it  in  the  Empire,  we  shall  have 
to  make  a  fresh  start  in  the  search  for  a  proper  method  of 
treating  the  population.  And  we  must  make  up  our  minds 
to  learn  from  Austria  in  this  matter.  For  we  may  state 
frankly  that,  however  imperfect  are  the  results  of  the 
method  of  handling  nationahties  in  Austria  and  Hungary, 
there  is,  nevertheless,  much  more  real  understanding  there  of 
this  type  of  problem  than  with  us,  where  it  is  only  dealt  with 
incidentally  and  unwillingly.  There  are  so  many  depart- 
ments in  which  the  Austrians  can  learn  from  us  that  we 
need  not  be  afraid  to  admit  cheerfully  their  wider  experience 
in  the  various  matters  in  which  it  really  exists. 

The  same  is  true  in  a  greater  degree  of  the  Pohsh  policy 
of  the  German  Empire  and  especially  of  Prussia.  Prussia 
took  possession  of  the  Poles  before  it  was  itself  a  national 
German  State,  and  had  then  no  idea  of  wishing  to  Ger- 
manise this  piece  of  country.  It  was  only  later  on  in 
Napoleon's  time  that  the  national  impulse  on  both  sides 
rose  high.  Then  in  1830  the  Prussian  Poles  were  stirred  by 
the  surging  wave  of  the  great  but  futile  Polish  revolution, 
the  spirit  of  the  dead  awoke  amongst  them  and  tried 
spasmodically  to  re-establish  a  State  organism  which  had 
been  ruined  by  its  own  weakness  and  incapacity.  Now 
Prussia  recognised  in  Poland  a  national  opponent,  without 
being  able  on  this  account  to  release  it  from  the  political 
tie,  because  our  entire  Eastern  frontier  becomes  an  impossi- 
bility if  a  new  and  politically  independent  Polish  Kingdom 
intersects  our  difficult  hne  of  defence.  Prussia  took  com- 
pulsion in  one  hand  and  material  prosperity  in  the  other 
and  demanded  mental  adhesion  in  exchange.  She  brought 
about  much  material  good  but  discovered  no  way  to  the 
heart  of  the  Pohsh  people.  Only  a  few  of  the  high  nobihty 
sought  to  further  the  transition  to  a  Prussian  State,  and 
they  had  naturally  always  been  international  and  connected 
with  Germany  through  marriage.  The  small  group  of 
Protestant  Poles,  too,  was  at  heart  royaUst  and  Prussian, 
and  remained  so  for  a  long  time  because  they  had  need  of 


8o  CENTRAL  EUROPE 

religious  support,  but  the  mass  of  Catholic  Poles  was  and  is 
Polish  Nationahst.  Even  in  so  far  as  they  no  longer  beUeve 
in  the  estabUshment  of  a  Polish  State  in  Prussian  territory 
and  enjoy  material  prosperity  in  Prussia,  a  division  yet 
remains  :  they  are  a  different  race.  The  German  schools 
have  made  them  useful  and  industrially  capable  biHnguists, 
but  not  Germans.  A  Pole  remains  a  Pole,  very  often  even 
when  he  goes  to  Uve  in  Berlin  or  WestphaUa.  Even  as  a 
travelling  workman  he  retains  his  national  character  and 
dreams  of  other  things  than  the  German  inspectors  who 
allot  him  his  work.  It  is  not  only,  and  certainly  not 
primarily,  the  opposition  between  the  servant  class  and 
gentlefolk.  This  plays  a  part  too  in  many  cases,  but  it  can 
be  seen  how  unwiUingly  the  Polish  miner  lets  himself  be 
enroUed  in  a  German  Social  Democratic  union.  Even  as  a 
Social  Democrat  he  must  remain  a  Pole,  and  insists  upon 
his  own  industrial  unions. 

That  in  spite  of  all  this  the  Prussian  Poles,  almost  without 
exception,  have  done  and  are  doing  their  duty  in  the  present 
war,  need  surprise  no  one  who  has  not  previously  believed 
the  talk  of  the  over-zealous  opponents  of  Poland.  The  mag- 
netic and  material  force  of  any  State  which  rouses  itself  up 
to  war  is  so  enormous  that  no  section  can  evade  it.  Think 
of  the  many  Germans  who  are  unfortunately  fighting  over 
there  in  the  Russian  army  !  They  have  not  all  been  com- 
pelled. Like  them  the  Russian  Pole  marched  with  the 
Russians,  the  Prussian  Pole  with  the  Germans,  the  Galician 
Pole  with  the  Austrians.  Since  he  could  not  fight  for  the 
vanished  Fatherland  of  his  dreams,  he  placed  himself  at  the 
service  of  the  Power  to  which  he  belongs.  And  if  he  dies, 
he  dies  for  a  Fatherland,  from  which  he  asks  consideration 
for  his  brothers.  In  this  case  too  there  must  be  a  great 
review  of  all  methods  after  the  war,  a  liberation  from 
enforced  Germanisation,  and  the  adoption  of  a  better 
interior  organisation.  But  this  in  itself  brings  us  Germans 
nearer  to  the  racial  problems  in  Austria  and  Hungary.  We 
must  begin  to  learn  to  understand  them,  we  must  indeed. 
****** 


CREEDS  AND  NATIONALITIES  8i 

It  makes  a  great  difference  whether  we  approach  the 
racial  problems  in  the  Southern  Dual  Monarchy  merely  as 
Germans  or  as  German  Mid-Europeans.  We  neither  ask  for 
nor  promise  any  sort  of  colourless  detachment,  for  this  is 
from  its  nature  unprofitable  in  such  questions  of  political 
life,  because  it  supposes  it  possible  to  classify  the  souls  of 
nations  in  divisions  which  can  be  forced  upon  them  from 
outside.  We  want  to  think  out  this  business  as  Germans, 
but  not  as  trivial-minded  people  who  think  only  of  them- 
selves and  their  immediate  interests,  rather  as  members 
of  the  greatest  and  most  weighty  nation  in  Central  Europe. 
From  the  oppressed  individual  German,  who,  surrounded  by 
Slavs  or  Magyars,  inconvenienced  in  his  business  by  Poles 
or  Roumanians,  continually  outvoted  by  Tzechs  or  Slo- 
venians, can  find  no  German  school  for  his  children,  can  get 
no  attention  paid  to  his  needs  by  the  district  superintendent, 
and  can  have  no  German  recorder  in  the  law  courts — from 
this  helpless  and  repressed  German  peasant  or  workman  who 
daily  considers  whether  or  no  he  must  not  sadly  forsake  the 
home  of  his  fathers,  we  certainly  do  not  expect  a  philosophical 
detachment  from  facts,  or  much  fellow-feehng  in  an  over- 
burdened heart  for  the  similar  troubles  of  all  the  other 
detached  fragments  of  nationahties.  He  fights  for  himself 
and  his  own  affairs,  and  when  he  talks  to  us  his  speech  is  full 
of  bitterness  and  anger.  In  his  abandonment  he  suffers  for 
his  nationaUty.  He  cannot  busy  himself  with  poUtics  in 
company  with  the  Tzechs,  Magyars  or  Roumanians,  for  he 
has  fallen  under  the  wheels,  and  for  the  time  only  obstinacy 
and  a  tough  skin  wiU  help  him.  But  this  man  is  not  typical 
of  the  German  spirit  in  general,  he  merely  stands  at  his  post 
as  the  representative  of  an  oppressed  small  nation.  As  such 
he  may  and  must  talk  as  he  does,  but  we  feel  it  painful  when 
Germans  who  are  not  in  the  same  position  adopt  the  same 
tone.  This  happens  daily,  it  is  true,  with  other  nationahties, 
but  aU  the  same  it  is  ungenerous.  When  a  German  repre- 
sentative of  a  big  industry  spoke  to  me  in  a  similar  way,  I 
left  him  in  no  doubt  that  I  was  much  troubled  by  his  tone. 
People  have  no  business  to  play  the  sufferer  when  they  are 


82  CENTRAL  EUROPE 

not  suffering  !  We  Germans  of  the  Empire  want  as  far  as 
possible  to  help  all  our  oppressed  brothers  in  Central  Europe, 
but  we  avoid  pleading  merely  German  claims  in  every  isolated 
language  group  and  in  opposition  to  every  fusion  up  to  the 
bitter  end.  Such  a  course,  were  it  adopted  by  every  one, 
would  be  the  ruin  of  the  partnership  between  the  two  Central 
European  States.  The  Germans  who  are  living  over  there 
in  Austria  or  Hungary  in  isolation  or  as  injured  persons  are 
absolutely  certain  of  our  sympathy  and  protection,  but  even 
they  should,  if  possible,  ponder  the  fact  that  reciprocal 
justice  elevates  a  people  and  that  the  other  nations  too  wish 
to  live  with  us. 

The  Germans  in  Austria  have  lost  much  during  the  last 
century.  From  the  eighteenth  century  onwards  they  were 
a  nation  maintaining  and  controlling  the  State ;  to-day,  in 
the  Danubian  Monarchy,  they  have  become  one  people 
amongst  many  peoples.  Their  important  services  in  the 
past  are  not  valued,  the  pains  they  took  to  raise  up  the 
small  nations  are  not  remembered.  Many  hundred  years 
ago  they  were  called  in  by  foreign  kings  and  bishops  in 
order  to  increase  industrial  ability  and  improve  agriculture. 
When  fresh  districts  were  to  be  civiUsed  emigrants  from  the 
Eif  el  or  Swabia  or  Thuringia  or  some  other  thickly  populated 
part  were  tempted  by  all  kinds  of  privileges  and  promises. 
They  came,  and  were  hospites,  guests,  and  benefited  them- 
selves and  the  country  which  coveted  their  services.  In  this 
way  they  were  intentionally  scattered  everywhere  between 
the  Alps  and  the  Carpathians  like  the  salt  of  the  earth,  and  did 
their  duty  as  citizens  faithfully  and  honestly.  They  made 
roads  on  which  others  now  travel,  they  planned  schools  in 
which  the  teaching  is  now  directed  against  them.  And, 
moreover,  they  have  the  feeling  that  they  have  not  been 
overcome  by  any  great  opponent  strong  in  himself,  but 
that  they  have  often  been  subjected  to  the  petty  makeshifts 
of  the  crowd,  in  defiance  of  those  who  are  yet  not  in  a 
position  to  reinstate  them.  This  often  makes  their  tone 
gloomy  and  bitter,  which  is  very  natural  but  is  not  favourable 
to  future  political  success.     Many  groups  of  people  in  the 


CREEDS  AND  NATIONALITIES  83 

German  Empire  have  ceased  to  take  interest  in  the  Austrian 
question  because  they  find  it  hard  to  tolerate  this  woeful, 
complaining  sort  of  tone.  In  this  matter,  however,  both 
sides  are  wrong,  for  the  Imperial  German  concerned  has  for 
the  most  part  no  idea  what  have  been  the  inmost  thoughts 
of  the  Austrian  German  and  of  his  father.  He  does  not  at  all 
understand  the  older  generation  in  the  Danubian  Monarchy, 
and  in  the  younger  he  stiU  sees  no  evidence  of  its  other 
and  more  vigorous  desires  and  of  its  more  complete  and 
conscious  adaptation  to  the  world  as  it  now  is. 

Richard  Charmatz  in  his  pamphlet  Osierreich-Ungarns 
Erwachen  (pamphlets  edited  by  Dr.  Ernst  Jackh,  Deutsche 
Verlagsanstalt,  Stuttgart),  remarked  of  the  younger  genera- 
tion of  Germans  :  "  They  are  learning  to  think  more  as 
Austrians  in  the  modern  sense  than  their  predecessors,  with- 
out on  this  account  being  less  German."  This  seems  to  us  to 
go  to  the  root  of  the  matter.  To  think  as  Austrians  means 
for  them  :  to  begin  to  think  as  Mid-Europeans.  No  German 
living  in  Austria  will  be  spared  this  revolution  in  thought,  nor 
indeed  will  the  members  of  nations  speaking  other  tongues. 
Other  valuable  points  of  view  are  to  be  found  in  the  books  by 
Springer  and  Popovici  referred  to  in  the  bibUography.  The 
former  discusses  the  question  as  an  Austrian  Social  Demo- 
crat, the  latter  as  a  Roumanian  Austrian  Imperialist. 
****** 

What  lingers  in  the  hearts  of  many  of  our  German  brothers 
in  Austria  and  Hungary  is  the  old  position  of  affairs  when 
the  State  was  the  property  of  the  House  of  Hapsburg  and 
an  administrative  district  of  the  German  Civil  Service. 
These  old  days  in  Austria  possessed  their  own  distinctive 
character,  rather  formal,  but  very  respectable  and  under- 
standable. The  German  Ostmark  was  historically  the 
centre  of  the  Monarchy.  With  it  as  starting-point  Bohemia 
was  Unked  up,  the  Adriatic  provinces  were  occupied, 
Hungary  was  set  free  and  Galicia  was  annexed.  The  entire 
State  was  an  enlarged  outwork  of  the  German  nucleus.  It 
was  an  administrative  State  which  afforded  to  the  nations 
linked  up  with  it  the  advantages  of  German  organisation ; 


84  CENTRAL  EUROPE 

a  police  State  which  attempted  to  take  charge  of  every  one 
whilst  regarding  them  all  as  subjects.  Nowhere  has  the 
absolute  State,  carrying  on  the  business  of  government 
reasonably  and  possessing  neither  nationality  nor  sentiment, 
ever  existed  so  completely  as  in  the  old  Austrian  Empire. 
Such  was  the  State  of  Maria  Theresa  and  also  of  her  son 
Joseph  II.,  with  his  very  different  outlook. 

Mettemich  wanted  to  maintain  this  ancient  Austrian 
State  artificially  in  the  midst  of  a  world  grown  national- 
ist. It  possessed  style  and  a  distinctive  character,  but  a 
character  that  of  course,  Hke  everything  earthly,  had  its 
limitations.  But  before  we  speak  of  the  cause  which 
destroyed  this  distinctive  State  we  must  get  a  grasp  of  its 
special  merits,  for  it  wiU  only  be  banished  finally  if  it  has 
first  been  properly  valued.  This  State  was  less  military 
than  Prussia,  less  purely  an  administrative  machine  than 
the  Electorate  of  Saxony,  less  patriarchal  than  old  Bavaria ; 
it  was  in  its  way  a  civihsing  influence,  and  considering  its 
circumstances,  modern  in  spirit.  From  the  military  point 
of  view  it  has  to  its  credit  the  long  and  by  no  means  easy 
campaigns  against  the  Turks.  It  played  the  Great  Power  in 
Italy  and  Flanders,  combined  much  vigour  with  compara- 
tively few  irritating  qualities,  and  proved  what  a  united, 
disciplined  and  well-graded  civil  service  could  accomplish  in 
the  hands  of  an  able  hereditary  monarchy.  This  old  State 
stood  the  test  of  Napoleonic  times  better  than  Prussia, 
which  was  more  designed  to  achieve  rapid  success.  It 
showed  a  surprising  tenacity  in  the  defence  of  its  hard-won 
gains  and  is  in  its  way  a  product  of  history  which  may  fairly  be 
called  vigorous,  efficient  and  imposing.  The  Dual  Monarchy 
lives  even  to-day  on  this  admirable,  homely  old  Austrian 
State,  just  as  the  French  RepubUc  Uves  on  what  it  has 
inherited  from  its  monarchy.  The  old  German-Austrian 
officials  live  there  as  though  the  ancient  State  still  existed. 
It  has  indeed  narrowed  its  boundaries  at  various  times, 
has  given  up  foreign  provinces,  such  as,  in  particular, 
Italy.  But  its  tradition  is  not  destroyed,  was  not  even 
destroyed  in  1848  when  all  foundations  were  shaken,  and 


CREEDS  AND  NATIONALITIES  85 

that  not  only  by  the  attacks  of  non-Germans  but  by  the 
wrath  of  Gemicin  farmers  and  townsfolk.  For  the  old 
Austrian  State  was  a  German  official  State  but  in  no  sense  a 
German  national  State.  The  German  element  in  it  sat  in 
official  rooms.  It  was  as  Uttle  affected  by  the  German 
national  movement  and  democracy  as  by  any  other  national 
popular  movement.  It  represented  the  old  order  of  things 
in  its  essence.  But  for  this  very  reason  it  was  the  object 
of  revolutionary  attacks  from  all  sides  alike,  even  from  the 
German. 

Mettemich  is  principally  known  to  us  as  the  opponent  of 
the  progressive  spirit  of  his  time.  He  was  in  his  way  a 
Central  European,  but  of  an  old  stamp  :  cavalier,  statesman, 
regent  with  no  trace  of  democratic  or  national  sentiment. 
From  the  Danube  to  the  mouth  of  the  Elbe  he  obstructed 
that  new  spirit  to  which  Friedrich  Wilhelm  II.  of  Prussia 
reluctantly  submitted  himself  in  the  wars  of  Uberation,  for  he 
knew,  or  believed,  that  his  State,  the  ancient  Austrian  State, 
would  be  broken  if  the  national  ideal  triumphed.  Hence 
the  revolution  in  1848  was  directed  against  him  and  his 
system,  and  it  affected  him  and  his  Emperor  much  more 
seriously  than  the  rulers  of,  say,  Prussia  or  Bavaria,  for  the 
Austria  of  that  time  was  anti-democratic  in  essence. 

But  in  what  consisted  the  old  German  Democracy  in 
1848? 

It  was  and  is  a  government  by  the  governed,  logically 
thought  out,  at  that  time  upheld  by  aspiring  townsfolk  and 
smedl  farmers,  later  adopted  by  the  working  classes  who 
were  pressing  up  after  them.  The  authority  thus  aspired 
to,  of  those  who  had  hitherto  been  the  governed,  rests 
theoretically  upon  the  assumption  that  the  masses  are 
capable  of  governing  by  elected  representatives  and  parha- 
mentary  majorities.  Against  this  assumption  objections 
were  and  are  raised,  based  on  the  nature  of  the  masses 
themselves,  on  the  technique  of  parhamentary  business,  and 
above  all  on  the  incompatibility  of  a  heterogeneous  popula- 
tion within  a  democratic  parhamentary  system.     This  latter 


86  CENTRAL  EUROPE 

was  the  special  Austrian  problem.  All  the  other  demo- 
cratic difficulties  were  experienced  in  the  purely  national 
States  too,  and  were  for  the  most  part  overcome,  but 
ancient  Austria  supplies  the  pattern  instance  in  the  world's 
history  of  the  doubly  compHcated  case  of  a  polyglot 
parliamentary  democracy  split  up  along  national  Unes ; 
and  the  Emperor  Franz  Joseph  I.  has  lived  through  this 
experiment  in  the  position  of  leader  from  1848  untU  now. 

Democracy  hands  over  to  the  population  through  the 
franchise  a  share  in  the  sovereignty,  under  the  assumption 
that  it  will  understand  how  to  form  majorities  capable  of 
governing.  This  is  in  itself  no  easy  matter  for  a  people 
who  have  hitherto  been  unorganised  subjects.  In  partially 
undeveloped  countries  they  often  get  the  franchise  without 
knowing  what  to  do  with  it.  They  send  up  to  ParUament 
delegates  without  cohesion,  local  celebrities,  orators  and 
respected  citizens,  and  are  surprised  if  the  Government 
manages  this  jumble  of  persons  as  it  pleases.  As  long 
as  a  democratic  representative  assembly  is  undiscipUned 
and  without  a  majority,  it  strengthens  in  the  main  the 
bureaucracy,  because  it  frees  the  latter  from  the  con- 
straint of  voting  taxes  without  itself  being  able  to  take 
over  the  conduct  of  affairs.  This  was  the  unexpected 
experience  of  almost  all  constitutional  Governments  after 
1848,  but  most  of  all  that  of  the  Austrian  Government.  In 
spite  of  the  altered  constitution  everything  remained  at 
bottom  as  of  old,  allowing  for  a  httle  more  effort  on  the 
part  of  the  Government.  And  it  would  have  so  remained 
throughout  the  Danubian  Monarchy  if  in  one  place,  viz.  in 
Hungary,  a  discipUned,  self-contained  organisation  had  not 
appeared  upon  the  scene.  The  Hungarian  Revolution  of 
1848-49  was  the  first  occasion  on  which  this  episode  of  a 
popular  rising  reached  the  dignity  of  an  historical  event. 
For  this  revolution  was  more  than  the  vague  desire  for 
government  of  polyglot  democratic  farmers  and  townsfolk, 
it  was  the  armed  rising  of  a  national  entity  which  was 
previously  almost  complete  in  itself.  The  Hungarian  noble 
y/as  a  different  kind  of  revolutionary  from  the  Viennese 


CREEDS  AND  NATIONALITIES  87 

artisan,  for  he  did  not  merely  wish  to  parade  the  streets,  to 
protest  and  to  bargain  a  little  with  those  in  authority.  He 
wanted  to  rule  himself,  and  he  knew  what  that  meant.  The 
reaUy  serious  nationality  problem  only  arose  with  the 
Hungarian  Revolution. 

But  before  we  discuss  the  Hungarians  and  their  in- 
fluence upon  all  the  other  non-German  elements,  we 
must  make  some  further  remarks  about  democracy  and 
nationalism. 

Democracy,  as  we  have  already  said,  is  the  admittance  of 
the  previously  governed  to  a  share  in  the  government. 
This  is  a  lengthy  process,  for  the  man  who  has  been  nothing 
but  mediaeval  serf,  labourer  and  subject  has  in  general  no 
desire  to  govern.  He  must  first,  in  the  course  of  generations, 
be  raised  out  of  his  torpor  and  enUghtened  before  he  can 
even  conceive  of  becoming  himself  a  factor  in  political 
government.  This  enhghtenment  was  the  work  of  the 
eighteenth  century,  and  even  princes  and  aristocrats  shared 
in  it  without  foreseeing  the  results  of  their  benevolent 
efforts  to  educate  the  people.  Without  desiring  it  people 
were  transforming  illiterates  into  future  revolutionists 
within  the  despotic  State  itself.  When  the  old  society 
sent  some  crumbs  of  its  knowledge  into  the  servants'  hall, 
it  was  imdermining  itself.  This  had  been  freely  done  in  the 
most  innocent  manner  in  the  benevolent  Austria  of  pre- 
Napoleonic  times. 

The  people  of  the  eighteenth  and  indeed  also  of  the 
nineteenth  centuries  accepted  the  education  offered  to  them 
from  above  slowly  and  suspiciously,  because  they  were  not 
accustomed  to  receive  benefits  without  reservation,  and 
because  they  themselves  had  no  presentiment  about  what 
was  given  them.  They  could  not  know  what  sort  of 
strength  was  asleep  within  them.  The  period  of  government 
by  the  nobility  or  by  the  cloister  had  lasted  so  long  that 
the  far-distant  times  of  ancient  general  freedom  and  of 
imtamed  racial  migrations  were  wholly  forgotten  and  lost. 
For  when  before  have  the  common  people  been  told  their 


88  CENTRAL  EUROPE 

own  history  ?  They  saw  that  there  were  lords  over  them 
and  noticed  that  the  ruling  classes  used  two  languages,  one 
for  their  European  intercourse,  whether  knightly  or  priestly, 
and  one  for  the  people.  This  second  language  now  became 
the  subject  of  popular  education.  The  stammer  of  the 
wage-earner's  cottage  became  a  written  language  by  the 
help  of  popular  education  and  the  national  school ;  the 
dialect  of  conquered  races  and  the  figures  of  their  lost  rulers 
became  subjects  of  instruction.  Out  of  the  mouths  of 
babes  and  sucklings  was  made  ready  the  power,  a  trembling 
power  at  first,  of  a  newly  arising  nationality.  The  national 
lower  classes  gained  ground  below  the  international  upper 
classes,  and  their  instinct  carried  them  so  far  that  the 
dwellers  in  the  castles  often  concealed  their  knowledge  of 
Latin,  French  or  German  in  order  to  become  the  popular 
leaders  of  these  formerly  speechless  masses.  Old  German  or 
Italian  aristocratic  families  began  to  speak  Tzechish  or 
Slovenian,  not  always  indeed,  but  when  they  were  in  the 
country.  The  once  despised  language  of  the  crowd  became  a 
subject  of  pride,  a  ground  for  obstinacy.  Often  the  national 
language  lived  on  and  raised  itself  by  means  of  religious 
contests,  Tzechish  was  spread  abroad  in  early  days  by 
Johann  Hus  and  his  followers.  The  Hungarians  in  castle  and 
cottage  developed  a  passion  for  Magyar  when  they  professed 
Calvinism  in  that  language.  Religious  movements  possess 
everjrwhere  the  greatest  democratic  and  national  influence. 
Even  the  Cathohcism  of  the  Counter-Reformation  had  such 
an  influence,  when  the  nobility  were  Protestant  and  the  lower 
classes  Catholic.  The  Tjnrolese  and  the  Steiermarker  peoples 
became  German  Catholics  when,  with  the  help  of  their  priests, 
they  drove  out  their  Protestant  lords.  Many  ruined  castles 
bear  witness  to  these  happenings.  In  this  way  nations 
developed  from  below  upwards,  their  individual  souls,  their 
special  God,  their  Mother  Mary  or  their  Catechism.  The 
deeper  the  faith  penetrates  among  the  masses  the  more 
provincial  it  becomes.  The  Polish  heaven  differs  from  the 
Roumanian  heaven,  and  the  Queen  above  the  stars  looks 
differently    on    the   Vistula    and    on    the    Isonzo.    These 


CREEDS  AND  NATIONALITIES  89 

are  no  distinctions  of  creed  in  the  theological  sense,  but 
national  growths.  And  the  spiritual  beginnings  are  often 
translated  with  surprising  rapidity  into  the  material. 
National  poets  arise  and  old  songs  are  written  out.  National 
dress,  which  is  often  only  a  remnant  of  an  old  discarded 
upper-class  culture,  is  held  in  special  honour  as  inherited. 
Romanticism  beautifies  and  enlarges  the  homely  legends 
and  sanctifies  the  old  peasant  style  of  architecture,  discover- 
ing wonderful  secrets  in  it  and  in  the  ancestral  food,  animals 
and  flowers.  In  such  a  time  of  awakening,  as  in  spring- 
time, even  shabby  peoples  are  beautiful.  It  is  the  awaken- 
ing of  the  masses  to  humanity,  the  first  steps  of  national 
democracy. 

This  process  of  development  took  a  somewhat  different 
course  in  each  of  the  hitherto  neglected  and  oppressed 
nationalities.  But  any  one  who  is  not  familiar  with  it  cannot 
understand  whence  comes  the  wonderful  vitality  and  passion 
in  the  nations  which  are  cUmbing  up  out  of  the  depths.  He 
judges  coldly  from  a  detached  point  of  view  and  thinks  it 
a  political  insanity  that  a  people  of  this  sort  should  regard 
itself  as  the  centre  of  the  universe.  And  this  indeed  is  so  if 
we  will  admit  only  the  successful  great  nations  as  worthy 
of  Ufe.  But  every  living  entity  and  every  nation  desires, 
when  the  mass  of  its  people  awake,  to  have  its  own  day,  its 
sacred  and  sunny  maytime,  and  strives  after  it  so  far  as  is 
in  its  power.  This  may  be  disturbing  and  absurd,  but  it  is 
very  human.  Those  who  have  to  solve  racial  disputes  must 
never  forget  this  national  spirit  whose  import  Herder  was 
the  first  among  important  thinkers  to  attempt  to  disclose. 
Herder,  understanding  the  soul  of  the  people,  did  not 
believe  in  the  permanency  of  the  Austrian  State,  a  very 
natural  attitude  for  him  and  for  all  who  study  race  psycho- 
logy without  military  statesmanship.  Psychologically  the 
ancient  Austrian  State  is  actually  burst  asunder  by  the 
birth  of  the  national  spirit,  and  what  binds  it  together  is 
the  fact  that  it  is  impossible  for  military  reasons  for  small 
sections  of  nations  to  maintain  themselves  in  the  world. 
The  military  State  coerces  the  nationalities,  the  old  Germano- 


90  CENTRAL  EUROPE 

Austrian  administrative  State  binds  together  the  untamed 
peoples'  States  of  later  growth. 

****** 
But  since  the  Germans  in  North  and  South  have  each 
experienced  a  similar  national  awakening,  they  ought, 
properly  speaking,  to  show  understanding  of  all  such  popular 
agitations,  even  if  they  appear  recalcitrant  and  antagonistic. 
The  Germans  too  were  overwhelmed  by  a  Latin-French 
civiHsation  until  they  became  genuine  free  Germans.  But 
there  is  one  very  remarkable  fact  about  the  older  stages  of 
the  nations,  and  I  do  not  remark  what  follows  in  order  to 
say  something  conclusive,  but  to  indicate  a  question  which 
is  significant  for  the  community  feeUng  in  Mid-Europe. 
Why  did  the  Germans  after  a  certain  stage  feel  no  more 
genuine  sympathy  for  the  agitators  among  the  young  nations 
following  in  their  footsteps,  and  why  did  they  themselves 
cease  to  exercise  Germanising  influence  ?  The  two  ques- 
tions are  intimately  connected.  Only  the  striver  can 
feel  love  and  attachment  for  those  who  are  beginning  to 
strive.  Whilst  the  Latin  Franks  (the  French)  were  young 
they  pressed  forward  their  national  boundaries  almost  up 
to  the  Rhine  ;  whilst  the  non-Latin  Teutons  (Germans)  were 
young  they  pressed  forward  their  national  boundaries  far  into 
the  East,  and  by  missions  and  the  pressure  of  authority  made 
distant  lands  practically  German.  But  then  their  force  of 
attraction  ceased  for  no  visible  outward  reason.  Formerly 
numbers  of  Slavs  or  other  foreign  peoples  had  emigrated  into 
Germany  (Brandenburg,  Lausitz,  Silesia,  Pommerania, 
Prussia),  but  then  they  were  all  at  once  faced  by  a  wall. 
To-day  they  are  still  faced  by  the  same  wall.  How  admir- 
able it  would  be  for  us  to  convert  the  Tzechs  into  Germans 
if  it  could  be  done  !  But  it  simply  cannot  be  done.  The 
time  for  it  is  past,  both  parties  are  too  old  for  it.  The 
Germans  have  long  since  lost  the  cheerful  natural  growth, 
the  rough  vigour,  the  childhkeness  of  their  mediaeval  Ger- 
manising spirit,  and  the  Tzechs  have  long  since  grown  less 
impressionable  than  were  the  Sorbs,  Wends  and  Liutitzen, 
or  whatever  else  they  may  have  been  called.     To  overlook 


CREEDS  AND  NATIONALITIES  91 

these  changes  brought  by  time  is  the  tragic  error  of  the 
present  Pan-German  party.  They  wish  to  accompHsh  by 
school  and  law  what  they  are  now  powerless  to  do  imagina- 
tively and  without  set  purpose. 

It  is  by  no  means  unimportant  to  point  out  in  this  con- 
nection that  the  modern  Germans  almost  everywhere  in 
the  world  are  unfortunately  bad  Germanisers.  In  my 
opinion  this  is  a  result  of  our  best  qualities.  We  are 
thinkers,  men  of  understanding,  engineers,  organisers, 
successful  prosaic  people,  perfect  apparatus,  invaluable 
voluntary  parts  of  a  machine,  but  just  on  this  account 
strange  to  the  children  of  nature  and  to  average  nations. 
This  indeed  appUes  in  a  much  greater  degree  to  the  Germans 
of  the  Empire  than  to  the  German  Austrians.  The  same 
abihty  which  opens  the  markets  of  the  world  to  us  and 
makes  our  armies  victorious,  closes  to  us  the  hearts  of  those 
who  are  climbing  up  out  of  the  mist.  Hence,  in  distant 
parts  of  the  earth  too,  we  only  make  passably  good  colonists. 
We  are,  if  the  comparison  will  not  offend,  sometimes  in  the 
position  of  a  privy  councillor  trying  to  manage  his  horse ; 
his  groom  can  do  this  much  better.  In  other  words  :  those 
Old  Austrian  officials  who  were  confronted  with  the  new 
national  movements  had  all  the  advantages  of  advanced 
political  civilisation,  but  lacked  the  innate  feeUng  for 
formless  creative  strength.  They  were  privy  councillors 
with  all  the  attendant  excellences  and  deficiencies.  Thus  it 
came  about  that  in  1848  an  unheard-of  shock  burst  upon 
that  well-governed  Austria,  which  then  included  Hungary : 
the  peoples,  the  nations  moved  according  to  their  own 
inspiration  and  not  in  the  prescribed  forms.  Mutterings 
were  heard  below,  at  the  foundations  of  the  State  :  the 
molecules  were  astir  in  the  ancient  stones  of  the  monarchy. 
****** 

The  Magyars  were  the  chief  nation  that  revolted  in 
ancient  Austria.  They  extorted  political  separation,  not 
at  once,  indeed,  in  the  year  of  revolution,  but  later  in 
1866.  They  became  a  State,  a  second  ruling  nation  along- 
side of  the  Germans.    Here  we  are  not  concerned  to  discuss 


92  CENTRAL  EUROPE 

the  details  of  their  alienation  from  the  Hapsburg  dynasty, 
an  alienation  which  may  be  traced  back  to  the  pre-Tm-kish 
period.  We  are  only  anxious  that  we  Imperial  Germans 
should  grasp  the  extraordinarily  powerful  and  undisputed 
part  that  they  play  within  the  monarchy  to  which  we  are 
allied.  I  have,  indeed,  often  pondered  over  this  remarkable 
people,  neither  Slavonic  nor  German,  which  dwells  in  our 
midst  and  is  even  now  helping  to  decide  the  fate  of  Germany. 
They  are  unlike  other  nations,  not  so  high  strung  as  the 
Western  peoples,  not  such  deep  thinkers  as  the  Germans,  not 
dreamy  and  inactive  as  are  often  the  Slavs,  not  mediaevally 
chivalrous  like  the  Turks,  but  a  wonderful  modern  nation, 
based  on  an  ancient  racial  migration,  self-assertive,  efficient, 
proud,  masterful,  political,  above  all  tenacious  in  their 
nationalism.  To  whom  shaU  I  compare  such  a  nation  ?  In 
their  fate  and  in  their  character  they  have  something  in 
common  with  the  Spaniards,  however  far  removed  from  them 
they  may  be  in  race.  The  Spaniards  and  the  Magyars,  in 
West  and  East,  are  the  first  nations  who  freed  themselves 
from  Mohammedan  control.  They  were  not  in  subjection  so 
long  or  so  completely  as  the  nations  in  the  Balkans  or 
Morocco,  but  sufficiently  long  to  have  to  bear  the  yoke  of 
foreign  rule.  They  did  not  only,  Uke  we  Germans,  experience 
some  years  of  Napoleonism,  but  incomparably  more.  Their 
whole  national  existence  was  at  stake  during  the  Turkish 
period,  and  noble,  priest  and  people  grew  up  cramped  in  the 
school  of  servitude.  But  the  Turkish  suzerainty,  on  the  other 
hand,  was  so  far  an  outside  influence  that  they  remained 
a  nation.  The  Turks,  as  we  have  already  noted,  had  no 
idea  of  converting  them  to  Mohammedanism.  Subdued 
but  not  broken  in  spirit  and  well  trained  to  arms,  they 
awaited  a  change  in  the  situation,  and  when  the  Austrians, 
after  an  heroic  struggle,  completely  freed  them  from  Turkish 
control,  they  were  very  far  from  blending  with  the  nation  of 
their  liberators  out  of  sheer  gratitude.  The  Hungarians  had 
as  little  desire  to  be  Austrian  as  the  Roumanians,  to-day, 
have  to  be  Russian.  But  the  Austrians  came  as  conquerors 
opposed  to  Turkey,  and  were  scarcely  more  Uberators  as 


CREEDS  AND  NATIONALITIES  93 

such  than  were  later  the  Russians.  They  sent  German 
officials  into  the  districts  that  had  been  freed  of  Turks,  and 
expected  the  Magyars  to  behave  like  some  Uttle  Slav  people 
that  had  been  set  free.  But  this  expectation  could  not  be 
realised.  The  negotiations  were  protracted  from  decade  to 
decade,  the  elective  Kingdom  of  Hungary  became  an 
inheritance  of  the  Hapsburg  dynasty,  out  of  opposition 
came  compromises.  But  at  last  the  Magyars  lost  patience, 
and  made  use  of  the  West  European  democratic  revolution 
of  1848  as  an  opportunity  for  their  own  differently  constituted 
national  revolution,  which  was  so  fiery  that  the  Austrians 
could  only  put  it  down  with  the  help  of  Russian  troops.  In 
this  revolution  the  national  Government  of  the  Magyars 
was,  in  the  first  instance,  ruined  for  the  second  time,  but 
only  in  order  to  reassert  itself  with  renewed  vigour  so  soon 
as  the  monarchy  was  in  danger  and  needed  the  Magyars. 
The  Battle  of  Koniggratz  was  a  victory  for  both  Prussian 
and  Magyar,  although  the  latter  did  not  appear  as  a  com- 
batant. The  Saxon  Minister  Beust  was  summoned  to 
Vienna  and,  with  the  aid  of  the  Empress  EUzabeth  and  the 
co-operation  of  Deak  and  Andrassy,  this  clever  non- Austrian 
formulated  the  Austro-Hungarian  Dualism.  This  put  an 
end  to  the  old  centralised  Austria,  and  from  Budapest 
started  the  Dual  Monarchy  and  the  present  State  with  its 
reorganised  distinct  nationahties 

*  ifh  *  *  *  * 

But  whUe  in  1867,  the  year  of  the  Ausgleich,  the  Austrians 
were  not  obUged  forthwith  to  regulate  anew  all  their  tradi- 
tions of  nationaHty  poUcy,  the  Magyars  in  Hungary  had  to 
settle  the  basis  of  their  future  relations  to  their  own  small 
nationalities.  Here  then,  for  the  first  time,  the  principles 
of  racial  poUcy  had  to  be  worked  out  by  a  nation  which  had 
hitherto  been  itself  under  the  yoke  of  a  foreign  people. 
What  success  did  they  have  ? 

The  Himgarian  Nationality  Law  of  1868  is  essentially  a 
language  law.  It  is  pubUshed  in  the  collections  of  statutes, 
but  its  main  provisions  are  also  printed  in  that  instructive 
work,  Geschichte  der  Deutschen  in  Ungarn,  by  R.  F.  Kaindel 


94  CENTRAL  EUROPE 

(Gotha,  1912) .  Every  inhabitant  of  Hungary  is  entitled  to 
draw  up  memorials  to  the  Central  Government  in  Budapest 
in  his  mother  tongue,  and  the  Government  is  obliged  in  its 
reply  to  use  both  Magyar  and  the  language  in  which  the 
memorial  was  written.  Laws  are  to  be  issued  in  Magyar, 
but  translated  into  all  the  languages  used  in  the  country. 
In  the  counties  the  records  may  also  be  kept  in  a  non-Magyar 
language  if  this  is  demanded  by  a  fifth  of  the  members.  In 
the  county  assemblies  every  one  may  use  his  own  language 
unconditionally.  Private  persons  and  communes  may  write 
to  their  county  authority  in  their  own  language.  The 
representative  councils  in  the  communes  choose  for  them- 
selves the  language  for  official  use  and  for  their  records.  In 
the  law  courts  every  one  may  use  his  mother  tongue  pro- 
vided this  is  authorised  for  use  in  the  records.  Nationality 
cannot  be  counted  as  an  obstacle  to  appointment  to  an 
office  or  to  the  conferment  of  an  honour.  The  Minister  of 
Education  has  the  duty  of  deciding  the  language  used  for 
instruction  in  the  Government  institutions,  but  he  is  bound 
to  see  that,  in  respect  of  primary  and  intermediate  schools, 
each  racial  group  of  people  living  together  in  considerable 
numbers  is  provided  with  educational  institutions  using  its 
own  tongue.  The  language  employed  in  private  institutions 
and  by  societies  is  determined  by  the  founder. 

This  law  of  1868  is  well  planned,  a  great  project  for  a 
contentious  period,  but  it  was  much  hmited  by  later  additions 
and  became  more  and  more  adapted  to  the  insistence  upon  a 
Magyar  official  language.  In  1879  instruction  in  the  Magyar 
language  was  made  compulsory  in  the  primary  schools. 
Any  teacher  may  be  dismissed  whose  scholars  are  not 
proficient  in  speaking  and  writing  the  Magyar  language  at 
the  end  of  four  years  !  A  law  of  1883  insisted  on  the  study 
of  the  Magyar  language  in  the  intermediate  schools  to  such 
an  extent  that  instruction  in  other  departments  was  bound 
to  suffer.  The  candidates  for  teachers'  posts  must  do  their 
examinations  in  Magyar,  That  hinders  even  the  German 
head  teachers  from  visiting  German  universities. 

In  respect  to  the  law  courts,  too,  the  original  law  suffered 
from  a  retrograde  movement.     The  President  of  the  Court 


CREEDS  AND  NATIONALITIES  95 

may  decide  on  the  exclusive  use  of  the  Magyar  language. 
The  jury  are  obliged  to  be  proficient  in  Magyar. 

The  conversion  of  place  and  personal  names  into  Magyar 
is  officially  insisted  upon. 

And  the  provisions  introduced  by  law  and  regulation  in 
opposition  to  the  spirit  of  the  original  law  were  still  further 
emphasised  by  everyday  practice.  Although  "  for  all 
citizens  living  together  in  considerable  numbers,  of  whatever 
nationality,"  intermediate  schools  must  be  provided  near 
the  district  where  they  live,  yet  we  read  in  the  official 
report  for  1911,  that  altogether  4102  Government  educa- 
tional institutions  (kindergartens,  primary  schools,  inter- 
mediate schools  and  gymnasia)  use  Magyar  as  the  language 
of  instruction.  Of  the  3299  educational  institutions  which 
are  maintained  by  the  individual  political  communes,  3028 
use  the  Magyar  language  exclusively.  Although,  under 
conditions  therein  stated,  the  original  law  allowed  it  to  be 
decided  by  resolution  that  the  commune  records  should  be 
kept  in  a  non-Magyar  language,  yet  such  resolutions  when 
passed  are  most  commonly  annulled  by  the  Government 
authorities.  German  books  are  forbidden,  German  news- 
papers were  kept  out  by  various  tricks  when  there  was  an 
opportunity  up  to  the  very  outbreak  of  war. 

Thus  it  is  evident  that  the  matter  is  by  no  means  settled 
by  what  is  in  itself  a  clear  and  good  fundamental  statute. 
This  should  be  noted  especially  by  those  who  beheve  that 
racial  peace  could  be  magically  brought  about  to-morrow  by 
a  wisely  thought  out  model  law.  Customs  and  administra- 
tive usages  are  at  least  as  important  as  laws.  But  all  over 
the  world  these  are  of  slow  growth  and  involve  innumerable 
discussions. 

*  ^t  Hf  He  He  Tff 

We  shall  try  to  put  ourselves  into  the  mental  attitude  of 
the  ruling  Magyars,  which  is  indeed  not  so  very  difficult 
for  us,  since  Germans,  wherever  they  are  in  power,  are  in- 
clined to  think  in  quite  the  same  way.  To  the  Magyars, 
naturally,  the  racial  complexity  of  their  State  is  always 
present.  They  know  that  they  themselves,  counted  by 
heads,  number  less  than  half,  and  that  with  equal,  free 


96  CENTRAL  EUROPE 

suffrage,  and  a  fair  partition  into  electoral  districts,  they 
could  always  be  driven  from  power  by  a  combination  of  the 
remaining  elements.  Hence  the  task  to  which  they,  whose 
national  will  to  govern  created  the  State,  devote  themselves, 
is  on  the  one  hand  to  guard  against  an  equaUsing  democracy, 
whether  openly  or  secretly,  and  on  the  other  to  increase  the 
number  of  Magyars. 

The  avoidance  of  democracy,  which  presumes  a  somewhat 
tortuous  thought  process  in  a  nation  which  has  obtained 
independence  by  revolution,  is  brought  about  by  franchise 
devices,  the  partition  into  electoral  districts  and  administra- 
tive mechanism,  the  morahty  of  which  we  shall  not  here 
discuss,  but  only  the  facts.  In  Prussia,  too,  similar  things 
did  and  do  occur.  But  aU  such  methods  have  only  a  Umited 
duration,  for  all  over  the  world  the  nations  are  approaching 
universal  suffrage  by  way  of  the  primary  school  and  universal 
conscription.  This  is  the  more  true  in  Hungary  since  there 
people  know  from  experience  that  the  ruling  dynasty  may 
any  day  place  equal  franchise  rights  upon  its  programme 
if  it  believes  that  the  Magyar  aristocracy  are  becoming  too 
unmanageable.  It  may  do  this,  and  that  is  enough  !  Hence 
the  Magyar  control  of  the  State  is  only  secured  if  in  the 
future  there  are  more  than  50  per  cent,  of  Magyars.  Therein 
lies  the  explanation  of  the  violent  zeal  to  Magyarise.  And 
in  fact  Hungarian  statistics  report  some  tangible  successes. 
Between  1900  and  1910  the  percentage  of  those  who  gave 
Magyar  as  their  mother  tongue,  or  who  could  not  prevent 
its  being  assigned  to  them,  increased  from  45.4  per  cent,  to 
48.1  per  cent.,  and  the  number  of  those  who  were  generally 
proficient  in  the  Magyar  language  increased  from  52.9  per 
cent,  to  57.4  per  cent.  If  this  is  continued  for  a  few  more 
decades  a  safe  majority  will  be  created  statistically,  and 
later  on  also  in  reality.  When  this  exists  universal 
suffrage  will  be  less  terrifying.  Accordingly — ^gain  time  and 
Magyarise  ! 

This  train  of  thought  has  much  in  its  favour  politically, 
and  we  should  not  really  have  done  justice  to  our  business 
of  understanding  if  we  were  prepared  to  trace  it  all  back 


CREEDS  AND  NATIONALITIES  97 

to  the  egoism  and  to  the  material  interests  of  the  rulers.  It 
is  obviously  indisputable  that  these  play  their  part,  but  it 
is  disputable  that  they  are  decisive.  Even  with  us  in 
Prussia  there  are  not  a  few  Conservatives  who  honestly 
beUeve  that  the  State  can  only  be  maintained  by  them 
and  with  the  aid  of  the  three-class  voting  system,  and  it 
must  be  acknowledged  that  similar  views  cire  even  more 
natural  to  the  Magyar  politician.  He  is  generally  well 
instructed  in  pohtical  law  and  foresees  the  doubtful  con- 
sequences of  a  polyglot  and  unstable  parUamentary  system. 
As  we  have  remarked  above,  a  polyglot  parUamentary 
system,  incapable  of  stable  majorities,  strengthens  the 
bureaucracy,  which  with  some  skill  and  a  few  recurrent 
favours  always  plays  off  the  disputants  one  against  the 
other.  The  Magyars  see  this  going  on  before  their  eyes 
over  in  Austria,  and  under  no  circimistances  wiU  they 
tolerate  it  amongst  themselves,  for  with  them  there  would 
not  even  exist  that  bureaucratic  tradition  which  in  Austria 
has  been  influential  from  old  days  down  to  the  present. 
Hungary  is  a  young  State  which  only  since  1867  has  had 
to  devise  for  itself  a  system  of  government  adapted  to  the 
old  Austrian  machinery,  and  which  is  stiU  in  a  state  of 
transition  between  the  old  coimty  administration  and  a 
modem  government  by  State  officials.  The  parhamentary 
power  of  the  two  opposing  Magyar  parties  does  not  upset 
this  still  developing  machinery,  since  both  Magyar  groups 
have  a  share  in  it,  but  a  direct  victory  of  the  united  non- 
Magyars  would  doubtless  overthrow  it,  and  would  result 
in  a  dictatorship  from  Vienna  if  not  in  worse  disasters. 
Thus  finally  there  is  a  struggle  between  parhamentary  rule 
and  the  democratic  principle  of  equality,  the  former  being 
Magyar,  whilst  the  latter  is  the  concern  of  the  small  nations, 
the  Roumanians,  the  Slovaks,  the  Slovenians  and  the 
Hungarian  Germans. 

«♦♦*♦* 
But  in  war  time  all  forms  of  political  wisdom  are  con- 
strained to  increase  their  knowledge.     The  various  speeches 
of  Graf  Tisza,  the  Hungarian  Minister-President,  show  how 


98  CENTRAL  EUROPE 

much  he  is  occupied  with  the  racial  problem  in  the  midst 
of  the  international  struggle.  For  indeed  the  Hungarian 
system  of  government,  whose  actual  foundation  we  have 
just  attempted  to  describe  from  the  Magyar  point  of  view, 
excludes  small  nations  inconsiderately  and  permanently 
from  any  share  in  the  government,  and  consequently 
there  remains  amongst  these  same  small  nations  a  measure 
of  uneasiness  which  is  only  too  easily  understood.  This 
does  not  show  itself  during  the  war  in  the  case  of  the 
Germans  because  the  whole  war  is  carried  on  in  such  close 
connection  with  Germany,  but  it  appears  amongst  the 
Roumanians  and  Southern  Slavs. 

The  three  miUion  Roumanians  are  certainly  better  off  in 

a  material  sense  in  Hungary  than  they  would  have  been  in 

Roumania,  for  the  Hungarian  State,  in  spite  of  many  defects 

in  administration,  is  in  a  higher  stage  of  development.     But 

of  course  in  Roumania  they  would  have  belonged  to  the 

ruling  nation,  and  here  they  do  not.     It  is  the  same  with 

the  Serbs,  but  not  quite  with  the  Croats,  who  are  half 

independent  in  Hungary.     But  they,   too,   have  in  their 

hearts  their  own  suppressed  thoughts   of   domination,  for 

they  are  all  tempted  by  the  impressive  and  dazzHng  example 

of  the  Magyars.     As  far  as  this  is  concerned  it  is  of  Uttle 

use  to  represent  to  the  small  nations  that  each  of  them 

would  be  of  very  small  importance  in  Roumania  or  Serbia, 

because  though  this  is  true  enough  it  is  no  consolation.     It 

must  be  frankly  confessed  that  unsatisfied  aspirations  will 

persist  both  here  and  in  all  similar  cases  in  the  rest  of 

Central   Europe    until    the    neighbouring    small    nations, 

which  exercise  a  magnetic  effect  upon  the  fragments  of  their 

race  in   the   great   Empires,    aie   brought  alongside  of  us 

into  a  great  free  Central  European  union,  and  until  in  the 

great  Empires  stable  and  universally  appUcable  nationality 

regulations  are  drawn  up  and  actually  enforced.     But  even 

if  a  Central  European  super-State  and  Central  European 

racial    toleration    must    one    day    exist,    this    would    not 

on  the  other  hand  portend  any  complete  sovereignty  of 

the  small  nations.     This  is  painful,  but  the  teaching  of 


CREEDS  AND  NATIONALITIES  99 

universal  history  makes  it  inevitable :  political  small 
concerns  require  support.  Hence  unsatisfied  national  aspira- 
tions will  remain,  disillusionments  which  no  Peace  Congress 
or  Minister-President  can  turn  into  joy.  But  nevertheless 
the  State  to  which  these  sectional  nations  belong  has  every 
inducement  not  to  drive  them  to  sullen  despair,  or  even  to 
passive  opposition.  This  is  the  lesson  that  must  be  learnt 
during  the  war.  Indulgence,  for  the  sake  of  preserving  the 
State,  in  the  things  which  can  be  granted  without  danger 
to  the  State  !  A  more  friendly  way  of  regarding  nationalist 
minorities  is  a  pressing  need  everjrwhere,  without  exception, 
in  Central  Europe.  This  must  be  the  very  genuine  inspira- 
tion of  our  Mid-European  State  federation  if  the  latter  is 
to  be  at  all  prosperous.  There  must  be  much  more  real, 
palpable  Uberalism  even  extending  beyond  the  Hmits  of 
language  !  This  is  essential  if  we  are  not  to  shed  our  blood 
in  racial  strife. 

****** 

The  racial  problem  in  Hungary  differs  greatly  from  the 
racial  problem  in  "  the  kingdoms  and  lands  represented  in 
the  Reichsrat,"  that  is  in  the  principal  portion  of  the  earHer 
single  Empire  of  the  Hapsburgs,  which  remained  over  after 
the  separation  of  Hungary.  Here  the  Hungarian  example 
influenced  especially  the  Tzechs,  who  possessed  a.-  ancient 
tradition  of  monarchy  and  would  gladly,  Uke  the  Hungarians, 
have  formed  themselves  into  an  independent  State  whilst 
at  the  same  time  the  Hapsburg  dynasty  was  maintained. 
And  they  have  for  many  years  abstained  from  any  share  in 
the  Austrian  parhamentary  system  as  a  protest  against  the 
German  Government  in  Austria,  which  denied  them  their 
Bohemian  State  rights.  They  are  the  inventors  of  that 
method  of  fighting  which  employs  abstinence,  obstruc- 
tion and  street  rioting  to  interrupt  pubhc  business  until 
demands  are  satisfied,  a  method  which  in  the  disturbed 
times  after  the  Baden  Language  Ordinance  was  occasionally 
borrowed  by  the  Germans,  and  was  also  at  times  practised 
by  the  Ruthenians  and  Poles. 

Although  before  and  especially  during  the  year  1848  the 


100  CENTRAL  EUROPE 

Bohemians  of  all  shades  of  opinion  had  been  amongst  the 
most  active  in  demanding  parliamentary,  provincial  and 
State  representation,  they  were  the  first  to  risk  the  Parlia- 
mentary system  which  they  had  acquired  in  order  to  obtain 
concessions  of  State  rights  from  the  Government.  And  the 
same  Government  which  a  few  decades  earher  would  hear 
nothing  of  popular  representation  now  showed  a  motherly 
concern  to  maintain  the  forms  of  the  parliamentary  system  in 
order  to  demonstrate  the  unity  of  the  State  by  means  of  the 
House  of  Representatives.  Of  all  parUamentary  histories 
none  is  richer  than  the  Austrian  in  storms,  fights  over 
business  procedure,  ill-advised  behaviour,  and  remarkable 
solutions  of  desperate  compUcations,  for  nowhere  in  the 
world  has  the  parUamentary  system  to  cope  with  more 
difficult  tasks.  This  was  so  under  the  old  franchise  system, 
when  the  voters  were  divided  into  curiae,  and  things  are 
not  very  different  since  the  great  franchise  reform  of 
1907.  Readers  of  our  German  newspapers  generally  hear 
only  about  the  uproarious  scenes  and  the  defects  in  the 
parUamentary  machine,  and  easily  forget  what  worr5dng 
work  has  been  carried  on  between  the  explosions.  As 
a  rule  the  Austrians  of  all  languages,  as  a  result  of  the 
endless  debates,  are  much  better  trained  in  parUamen- 
tary figh.--  than  we  need  to  be  with  our  simpler  conditions. 
To  any  one  who  wants  to  understand  the  details  of  this 
dispute  we  recommend  as  an  introduction  the  second 
volume  of  Charmatz's  Osterreichs  innere  Geschichie  von 
1848-1907  (Teubner,  Leipzig)  and  then  the  books  already 
referred  to  by  Springer  and  Popovici,  But  for  our  purpose 
here  we  can  only  treat  quite  generally  of  the  nature  of 
the  influence  of  racial  disputes  upon  the  conduct  of  the 
Austrian  State  as  a  whole. 

The  subjects  of  dispute  are  almost  the  same  as  those 
already  touched  upon  in  discussing  the  Hungarian  separa- 
tion :  official  language,  and  that  both  for  home  and  foreign 
affairs,  language  used  in  the  law  courts,  conditions  of  the 
appointment  of  officials,  national  industrial  policy,  school 
and  university  questions.     The  question  of  military  language 


CREEDS  AND  NATIONALITIES  loi 

was  raised  too,  and  with  this  the  point  was  reached  where 
the  niHng  house,  controUing  all  alike,  could  not  give  way. 
All  the  other  points  in  the  end  admit  of  discussion,  but 
of  course  no  statesman  wiU  find  any  binding  formulae  which 
will  exclude  all  uncertainty,  especially  in  case  of  mutual 
ill-will.  There  have  been  endless  discussions  and  deUbera- 
tions  about  the  matter,  and  there  must  indeed  be  many  and 
prolonged  further  discussions  after  the  war.  The  struggle 
seems  repeatedly  to  endanger  the  cohesion  of  the  State 
altogether,  and  often  the  Reichsrat  in  Vienna  as  well  as  the 
Landtag  in  Prague  have  only  been  able  to  make  a  show  of 
carrying  on  their  deliberations,  and  a  complete  official 
despotism  has  come  to  the  rescue  armed  with  the  much- 
discussed  Clause  14.  The  most  serious  needs  of  the  State, 
such  as  especially  the  Austro-Hungarian  financial  Ausgleich, 
have  not  been  definitely  settled,  because  a  business  which 
from  a  distance  people  would  be  incUned  to  regard  as  a 
purely  technical  matter  really  involved  the  very  deter- 
mination to  maintain  the  State  at  all.  The  parliamentary 
system  which  is  a  product  of  the  democratic  age  has  become 
unusable  because  it  is  handicapped  by  nationalism,  the 
second  result  of  democracy.  The  impulse  of  the  nations  to 
govern  got  possession  of  the  machinery  for  popular  repre- 
sentation and  for  the  time  thrust  aside  aU  other  points  of 
view,  demanded  a  franchise  and  provincial  boundaries  only 
according  to  its  own  need,  and  destroyed  the  legends  of  the 
aU-healing  force  of  a  normal  democratic  Government 
independent  of  race. 

****** 
The  Germans  in  Austria,  so  long  as  Galicia  is  represented 
in  the  Reichsrat,  are,  it  is  true,  the  ancient  ruling  nation, 
but  they  make  up  hardly  more  than  35  per  cent,  of  the 
population.  Hence,  with  the  existing  poHtical  limits  of 
Austria,  they  are  quite  unable  to  carry  out  any  policy  with 
regard  to  the  Magyars,  even  if  they  wished  to  do  so.  But 
who  can  say  whether  or  no  they  do  wish  it  ?  They  have 
had  none  of  the  schooling  of  oppression ;  on  the  contrary 
they  have  been  the  most  faithful  and  much  indulged  servants 


102  CENTRAL  EUROPE 

of  the  reigning  dynasty.  Consequently  they  are  lacking 
from  the  outset  in  strength  of  mind  and  determination, 
which  are  hardly  to  be  found  in  them  even  in  the  height  of 
combat.  It  is  difficult  for  them  to  understand  that  they 
too  must  educate  and  force  themselves  on  their  side  to 
become  a  national  power  in  the  country  of  nations,  and  no 
sooner  is  the  political  atmosphere  bearable  than  they 
relapse  into  their  gentle  calm,  charming  but  dangerous  to 
themselves.  Many  of  them  are  much  more  interested  in 
the  foreign  politics  of  Austria-Hungary  as  a  Great  Power, 
and  in  its  economic  and  social  policy,  than  in  the  contest 
about  whether  the  representative  of  the  commune  or  the 
school  superintendent  in  a  Bohemian  country  town  should 
be  German  or  not.  But  what  use  was  it  ?  The  problem 
was  there  and  was  forced  upon  them.  Only  in  actual  fight 
could  they  be  roused  up  to  resentment  and  passion,  and 
hence,  somewhat  heartbroken,  they  slowly  and  inevitably 
become  a  nation  like  the  others  in  the  country  of  nations. 
But  how,  so  they  ask  themselves  in  the  midst  of  this  enforced 
development,  can  and  ought  a  State  to  subsist  which  is 
solely  composed  of  nations,  some  of  whom  celebrate  their 
festival  of  brotherhood  in  the  East,  others  in  the  North, 
and  yet  others  in  the  South  ?  We  recall  the  time  when  the 
spokesman  of  the  Austrian  Germans  came  to  us  of  the 
Empire  to  talk  of  a  day  of  revenge  which  should  bring  about 
the  end  of  all  political  union  with  Slavs.  It  was  about  the 
year  1888  that  I,  as  a  young  student  in  Leipzig,  heard  for  the 
first  time  a  threatening  revolutionary  speech  of  that  kind 
from  Prague  students,  which  was  later  followed  by  many 
other  such  speeches  by  older  men.  We  remember  the  days 
when  Tzechs  sent  greetings  to  Russians  in  speeches  savouring 
of  the  clang  of  swords,  and  went  to  Nancy  to  drink  a  wordy 
brotherhood  with  the  French ;  when  similar  tokens  of 
a  friendship  dangerous  to  the  State  were  sent  by  the  Austrian 
Italians  to  Italy  and  by  the  South  Austrian  Slavs  to  Serbia. 
All  this  actually  happened.  People  spoke  openly  of  Pan- 
Slavism,  of  Greater  Serbia,  of  Greater  Roumania,  of  the 
Italian  Irredenta,  of  Pan-Germanism,  and  of  every  barely 


CREEDS  AND  NATIONALITIES  103 

conceivable  eccentric  sort  of  alliance,  whUst  according  to 
the  judgment  of  a  prominent  scholar  a  commission  was 
deliberating  in  Vienna  whether  or  no  Austria  should  continue 
to  be  a  State  at  all.  But  even  as  we  bring  all  this  home  to 
ourselves,  the  completed  picture  ends  by  bringing  us  comfort, 
for,  in  the  midst  of  all  this  tension  and  national  dismember- 
ment, the  Austrian  State  nevertheless  maintained  a  pro- 
gressive economic  life,  and  a  military  power  which  now 
during  the  war  is  showing  itself  more  clearly  the  longer  the 
test  goes  on.  All  the  national  groups  have  declared  at  some 
time  or  other  that  the  State  must  perish,  but  those  con- 
demned to  death  often  hve  longest,  and  when  foreign  foes 
threaten  the  old  distracted  Austria  with  death,  almost  all 
these  groups  take  fright  and  take  down  their  weapons  from 
the  wall  for  Emperor  and  Fatherland  ! 

This  real  unity  might  have  manifested  itself  at  the 
beginning  of  the  war  with  quite  a  different  fortune  for  the 
monarchy  if  the  Austrian  Government  had  had  sufficient 
confidence  to  summon  the  House  of  Representatives  to 
Vienna  in  the  early  days  of  August  1914,  as  was  done  in 
Berhn  and  Budapest.  The  omission  to  summon  Parliament 
throws  more  light  than  anything  else  on  the  position  of 
affairs  in  the  country  of  nations.  The  ParUament  of  these 
disputing  peoples  is,  even  at  the  outbreak  of  war,  no  simple 
and  obviously  essential  expression  of  the  will  of  the  State. 
It  has  quarrelled  so  much  in  the  past,  it  has  been  so  difficult 
to  foster  the  majority  habit  there  !  But  this  neglect  at  the 
beginning  of  the  war,  due  to  a  really  unnecessary  feehng  of 
anxiety,  must  be  compensated  for  at  the  end,  for  at  some 
time  the  National  Assembly  must  at  least  take  upon 
their  shoulders  the  State  finances.  Things  will  be  much 
more  difficult  indeed  than  they  would  have  been  in  August, 
but  the  day  when  the  Austrian  House  of  Representatives 
assembles  will  show  if  and  how  the  great  joint  war  with  its 
numberless  bloody  sacrifices  has  strengthened  the  feeling  for 
the  common  State  among  the  conflicting  nations,  so  that  they 
all  again  wish  to  be  Austrian  because  there  is  and  can  be  no 
longer  anything  else  for  them.     After  the  war,  we  hope,  the 


104  CENTRAL  EUROPE 

Pan-Slav  dream  will  have  vanished,  the  ItaUan  boundary 
question  will  be  somehow  settled,  Pan-German  particularism 
will  be  transformed  into  a  genuine  feeUng  for  the  union  of  the 
two  Central  European  Powers.  It  will  be,  indeed,  necessary 
to  balance  accounts  subsequently  with  the  traitors,  and  some 
very  difi&cult  national  differences  wiU  burst  out  as  soon  as 
the  guns  are  silent ;  but  this  will  pass,  the  peoples  themselves 
and  the  State  wiU  remain.  The  wounds  resulting  from  the 
war  must  somehow  heal  up.  And  then  we  wish  to  share 
the  experience  of  these  things  without  obtrusiveness  but  with 
the  active  co-operation  of  the  German  Empire. 


Whilst  the  different  nationalities  were  thus  passionately 
quarreUing,  a  remarkably  powerful  companion  to  the 
ancient  Austrian  bureaucracy,  the  rapidly  growing  Social 
Democracy,  was  growing  up  alongside  of  developing  industry. 
The  tactics  of  the  Austrian  Social  Democracy  are  both 
interesting  and  instructive,  and  the  more  so  since  the  party 
has  been  well  managed  and  on  a  definite  theory,  and  the 
records  of  its  conferences  afford  important  evidence  of  its 
development.  We  will  attempt  shortly  to  describe  the 
process.  The  beginnings  of  the  Austrian  Social  Democracy 
are  of  German  origin.  At  one  time  it  was  hardly  incorrect 
for  a  weU-known  German  member  of  the  party  to  say  to 
me  :  "In  Austria  we  Social  Democrats  are  the  most  powerful 
Germanising  influence. ' '  Withal  it  was  tacitly  supposed  that 
the  Tzechs,  Poles,  Ruthenians  or  even  the  Slovenians, 
gripped  and  awakened  by  the  German  agitation,  would 
also,  in  a  more  distant  future,  be  weaned  from  their  accus- 
tomed purpose  by  the  party  leaders  in  Vienna.  It  was, 
indeed,  properly  an  Imperial  Social  Democracy.  Active 
against  capitalism,  agrarianism  and  bureaucracy,  determined 
in  all  the  demands  of  labour,  it  believed  that  the  destructive 
influence  of  nationaUty  might  be  overcome  by  an  inter- 
national programme.  This,  as  we  know,  was  not  quite 
successful.  As  the  foreign-speaking  children  grew  up  they 
broke  loose.     Now  the  party  consists  of  national  clubs  with 


CREEDS  AND  NATIONALITIES  105 

a  very  loose  common  superstructure ;  even  the  trade  unions 
are  involved  in  the  separation  of  nationalities,  and  in  the 
districts  where  racial  disputes  are  hottest  the  national 
unions  are  already  organised  separately.  Nationahsm  was 
stronger  than  proletarianism.  This  need  not  always  be  so, 
but  it  is  the  existing  state  of  affairs. 

The  first  dictum  which  the  Austrian  Social  Democrats 
used  to  turn  aside  racial  disputes  runs  thus :  "  That  is  a 
middle-class,  capitalist  affair,  for  it  is  at  bottom  nothing 
but  a  quarrel  about  poUtical  advantages  and  political 
burdens."  Correctly  thought  out  from  the  materiaHstic 
standpoint  but  not  adequate  in  practice !  It  is  actually 
true  that  in  all  disputes  about  nationality  and  language 
certain  financial  or  business  interests  are  fought  for  too. 
When,  for  instance,  the  Hungarian  agrarians  set  up  their 
national  Government  they  did  this  not  without  regard  to 
the  land  laws,  the  com  trade  and  the  regulation  of  wages. 
When  the  German-Bohemian  and  the  Tzechish  manufac- 
turers quarrelled  over  their  respective  influence  on  the 
Ministry,  Government  contracts  were  certainly  not  absent 
from  their  thoughts.  When  the  German  provinces  protested 
against  the  Gahcian  Poles,  they  were  influenced  in  no  small 
degree  by  the  fact  that  under  the  rule  of  the  Polish  majority 
they,  as  the  richer  minority,  had  to  pay  for  PoUsh  canals 
and  banks  of  credit  in  which  they  had  not  the  least  interest. 
All  over  the  world  poUtical  power  signifies  also  economic 
interests  and  money.  And  when  the  Social  Democrats 
called  attention  to  this,  they  as  proletarians  had  an  indis- 
putable and  logical  right  to  do  so,  only  they  overstretched 
their  bow  by  often  in  the  course  of  their  agitation  putting 
forward  this  solution  as  the  only  genuine  explanation  of  the 
matter ;  and  this  reacted  on  themselves.  The  Moravian 
Slovaks  and  other  comrades  did  not  permanently  beUeve 
what  the  party  orators  said  :  that  it  was  all  the  same 
to  them  as  workmen  whether  German  or  Slovak  were 
the  legal  language  in  Briinn.  Even  the  simplest  work- 
man, and  indeed  he  esp)ecially,  is  influenced  and  pervaded 
by  the  party  spirit  of  his  nationality.     Moreover  a  polyglot 


io6  CENTRAL  EUROPE 

party   system   and   trade   union   machinery  is   almost   as 
clumsy  as  a  polyglot  Parliament. 

But  in  order  to  establish  definitely  their  avoidance  of 
racial  quarrels  in  the  face  of  the  national  movements  which 
arose  even  in  the  proletarian  class  and  were  intentionally 
made  use  of  by  the  opposing  parties,  the  Social  Democrats 
could  not  confine  themselves  to  a  perfectly  general  inter- 
national creed,  but  were  obliged  to  adopt  an  attitude 
towards  local  questions.  This  was  so  in  the  Social  Demo- 
crats' national  programme  of  1899.  This  programme  was 
issued  some  seven  years  before  the  struggle  for  the  franchise, 
which  has  hitherto  been  the  most  effective  achievement  of  the 
Austrian  Social  Democrats.  Hence  it  goes  without  saying 
that  universal,  equal  and  direct  suffrage  were  put  forward 
as  the  solution  of  the  racial  dispute.  We  have  already 
remarked  that  this  healing  influence  has  at  least  not  taken 
immediate  effect.  It  may  rather  be  said  that  the  growing 
agitation  and  the  increased  number  of  active  members  of 
the  party  has  widened  the  division  between  the  groups.  It 
may  be  that  with  a  thoroughgoing  democracy  social  problems 
would  ultimately  become  so  important  that  they  would 
overrule  language  problems,  but  certainly  this  is  not  to  be 
looked  for  until  definite  nationality  regulations  have  come 
into  force  throughout  the  whole  of  the  country  of  nations 
as  a  result  of  numerous  debates  and  resolutions.  The  social 
democrats  demand  such  a  regulation  of  nationalities  in  the 
place  of  the  traditional  self-governing  bodies  of  the  Crown 
lands  with  national  boundaries.  And  in  this  they  concur 
with  the  German  nationalist  demand  for  the  division  of 
Bohemia.  The  resulting  nationalist  unions  must  conduct 
their  own  business,  whilst  a  generaHaw  in  force  everywhere 
protects  the  minority.  A  State  language  is  not  to  be  recog- 
nised, but  a  language  of  intercourse  is  allowed  as  possible. 
Whether  this  language  will  not  ultimately  be  necessary 
for  all  the  higher  authorities  and  will  not,  in  the  case  of 
the  army,  unavoidably  develop  into  a  State  language, 
is  not  worked  out  in  detail.  Finally,  the  right  of  every 
nationality  to  national  existence    and    national    develop- 


CREEDS  AND  NATIONALITIES  107 

ment  is  recognised,  but  it  is  also  stated  that  the  pro- 
gress of  civilisation  depends  on  the  united  solidarity  of  all 
nations. 

AH  this  can  be  accepted  as  correct,  although  we  miss  any 
explanation  of  how  the  special  rights  of  nationahties  will 
combine  with  the  necessary  solidarity.  Social  democracy, 
too,  must  ultimately  result  in  a  number  of  different  settle- 
ments made  according  to  the  relative  strength  of  the  several 
elements  at  a  particular  time,  and  according  to  general 
poUtical  laws.  But  it  has  an  undoubted  advantage  over 
the  radical  popular  parties  in  that  it  puts  the  sense  of 
common  needs  which  inspires  social  legislation  much  more 
prominently  into  the  foreground,  and'this  is  a  practical  and 
satisfactory  preparatory  work  for  all  Mid-European  schemes. 
****** 

A  section  on  Poland  might  be  demanded  at  this  stage  of 
our  work,  but  during  the  war  all  PoUsh  conditions  and  plans 
are  so  unsettled  that,  although  the  Polish  question  would 
occupy  the  chief  place  in  any  discussion  on  the  "  objects 
of  the  war,"  it  does  not  as  yet  fall  within  an  argument  as 
to  the  permanent  constitution  of  Mid-Europe.  Upon  the 
form  assumed  by  victory  and  the  conclusion  of  peace  will 
depend  the  importance  of  this  war  as  a  turning-point  in 
PoUsh  history.  The  Poles  themselves  desire,  so  far  as  I  can 
understand,  first  union,  and  then,  if  it  be  possible,  self- 
government.  Amongst  the  pohtically  instructed  represen- 
tative Poles  only  a  few  beUeve  in  a  new  absolutely  inde- 
pendent Poland  lying  between  Russia  and  Mid-Europe.  A 
larger  number  hope  for  an  Austrian  Poland,  which  would 
include  the  greater  part  of  the  nation  and  would  secure  a 
sort  of  Hungarian  independence  within  the  Danubian 
Monarchy.  It  is  difficult  to  believe  that  Prussia  will  alter 
her  eastern  frontier  very  much  unless  she  is  compelled  to  do 
so.  Whether  Austria  wiU  grant  a  subordinate  autonomy  to 
her  Poles,  and  whether  they  are  in  a  position  financially 
to  have  their  own  subordinate  state,  must  be  discussed  by 
both  sides.  There  is  much  in  favour  of  this  solution  from 
the  point  of  view  of  the  Austrian  Germans.     But  what  will 


io8  CENTRAL  EUROPE 

then  become  of  the  Ruthenians  if  they  stay  in  Galicia  ? 
Yet  so  much  must  be  said  during  the  next  months  in  many 
other  connections  about  this  and  allied  questions  relating 
to  the  eastern  frontier  that  it  is  unnecessary  that  we  should 
here  adopt  any  direct  attitude  towards  the  important 
political  questions  of  the  day.  It  may  very  well  be  that 
the  establishment  of  Poland  will  be  the  strongest  impulse 
towards  the  creation  of  Mid-Europe.  But  this,  if  it  comes 
to  pass,  will  be  accomplished  in  the  first  instance  in  the 
rooms  of  the  diplomatists,  for  only  there  can  the  necessary 
understandings  between  the  sovereigns  be  prepared  for.  It 
is,  however,  certain  that  the  new  Poland  is  hardly  conceivable 
without  a  previous  treaty  between  the  Central  European 
States. 

And  over  all  these,  over  the  Germans,  French,  Danes  and 
Poles  in  the  German  Empire,  over  the  Magyars,  Germans, 
Roumanians,  Slovaks,  Croats  and  Serbs  in  Hungary,  over 
the  Germans,  Tzechs,  Slovaks,  Poles  and  Southern  Slavs  in 
Austria,  let  us  imagine  once  again  the  controlling  concept 
of  Mid-Europe.  Mid-Europe  wiU  have  a  German  nucleus, 
will  voluntarily  use  the  German  language,  which  is  known  all 
over  the  world  and  is  already  the  language  of  intercourse 
within  Central  Europe,  but  must  from  the  outset  display 
toleration  and  flexibiUty  in  regard  to  all  the  neighbouring 
languages  that  are  associated  with  it.  For  only  so  can  that 
fundamental  harmony  grow  up  which  is  essential  for  a 
Great  State,  pressed  and  threatened  from  all  sides.  We 
Germans  of  the  Empire  need  to  devote  much  more  genuine 
attention  and  care  to  this  central  problem  of  the  allied 
monarchy  than  we  have  done  hitherto.  And  not  only  to  the 
technical  and  political  problem  in  itself,  but  especially  to 
the  feelings  of  the  peoples  who  are  to  be  allied  with  us  for 
better  or  for  worse.  In  this  respect  much  has  been  lacking 
before  the  war,  for  although  our  interest  in  the  fate  of  our 
German  brethren  in  Austria  and  Hungary  was  not  very 
extensive,  yet  it  is  notorious  that  our  knowledge  of  the 
previous  history  and  affairs  of  the  Hungarians,  Bohemians, 


CREEDS  AND  NATIONALITIES  109 

Poles  and  Southern  Slavs  has  been  still  more  limited.  Our 
eyes  were  directed  towards  the  West.  We  were  studying 
the  nations  of  an  older  civilisation,  and  learnt  much  and 
discovered  much  from  them,  but  the  developing  smaller 
civilisations  in  the  East  were  not  important  enough  for  us, 
just  because  people  felt  a  more  personal  relation  with  the 
Romance  cultured  languages  than  with  the  speech  of  their 
companions  in  arms.  In  this  respect  the  new  generation 
growing  up  after  the  war  will  do  better  than  the  old  people, 
so  that  a  type  of  Mid-European  may  be  worked  out  including 
all  elements  of  culture  and  strength,  the  bearer  of  a  civiUsa- 
tion  of  rich  and  varied  content,  growing  up  around  the 
German  nationality. 

I  think  of  the  first  days  after  the  war.  Whither  shall  we 
proceed  ?  In  the  first  place  most  of  the  Romance  countries 
will  be  as  good  as  closed.  Journey,  you  birds  of  passage, 
into  the  Carpathians,  take  your  mandolins  with  you,  let 
the  gypsies  play  something  for  you  in  the  forest  towns. 
Climb,  you  mountaineers,  not  only  as  heretofore  in  the 
Tyrol  and  the  Dolomites,  but  also  further  east,  as  far  as 
Steiermark  and  Karst,  and  then  bathe  in  the  broad  sunny 
Flatten  Lake.  Visit,  you  seekers  of  art,  the  beautiful  secret 
comers,  the  casties  and  churches,  the  homely  town  architec- 
ture ;  examine  the  curiosities  of  Prague,  the  antiquities 
of  Cracow,  and  the  proud  and  beautiful  Graz !  There, 
everjrwhere  you  will  find  both  Gothic  and  Baroque  as  well 
as  many  fine  modern  buildings.  Go  to  Passau  on  the 
Danube  and  let  them  take  you  to  the  Kaiserstadt,  and  then 
again  to  Gran  and  to  the  magnificent  castie  and  town  of 
Ofen  and  Pest !  If  you  are  interested  in  racial  matters  go 
and  visit  the  isolated  fragments  of  peoples  in  the  Zips  or 
in  Siebenbiirgen,  or  near  Struhlweisenburg.  Tell  your 
chauffeurs,  you  owners  of  motor-cars,  that  the  Imperial 
roads  are  excellent,  and  try,  you  hunters  and  cavaliersf 
whether  the  Beskiden  or  the  Bosnien  are  not  delightful 
mountains  for  you,  such  as  cannot  be  found  in  the  over- 
civilised  West.  Visit,  you  wounded  soldiers,  the  battle- 
fields of  the  greatest  mountain  war  in  the  history  of  the 


no  CENTRAL  EUROPE 

world !  If  every  year  a  hundred  thousand  more  Germans 
of  the  Empire  would  travel  in  the  faithful  neighbour- 
ing country,  then  in  addition  to  the  pleasure  it  would 
produce,  it  would  also  be  of  much  poUtical  value,  for  there 
the  people  are  franker  than  in  the  more  frequented  foreign 
countries.  I  remember,  as  I  write,  many  glorious  hours  on 
the  Polish  ridge  in  the  Tatra  and  as  far  as  Dalmatia.  How 
brilliant  was  the  evening  on  the  Danube  travelling  to 
Budapest !  And  how  genuinely  national  was  the  dance  up 
there  on  the  Koralp  in  Steiermark !  Well,  a  pleasant 
journey ! 


CHAPTER  IV 

THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE 

Creeds  and  nationalities  constitute  the  oldest  and  most 
tangible,  but  by  no  means  the  only,  lines  of  division  amongst 
the  population.  There  are  other  cleavages  which  are  more 
connected  with  economic  position  and  occupation,  without 
being  wholly  economic.  Differences  which  we  wish  to 
express  as  economic  temperament  or  economic  character. 
These  cannot  be  discussed  with  statistical  data  like  the 
creeds  and  nationalities,  which  are  now  become  stable. 
Here  everything  is  still  in  solution,  and  every  sort  of 
transitional  form  is  possible  and  is  constantly  met  with. 

May  I  first  speak  of  the  economic  temperament  in  North 
and  Central  Germany  ?  In  the  eighteenth  century  this 
North  German  district  stUl  possessed  no  economic  character 
ol  its  own.  Its  population  in  the  agricultural  districts,  in 
the  industries  in  the  small  towns,  and  even  in  the  few  large 
towns,  consisted  of  very  much  the  same  type  of  people  as 
those  who  were  then  living  in  Bohemia,  Austria,  and  as  far 
away  as  Cracow.  They  were  a  people  the  unschooled  lower 
stratum  of  which  worked  plainly  and  laboriously  in  order 
that  above  them  might  be  set  up  an  educated  middle-class 
and  a  landowning  nobility.  These  were  often  surprisingly 
homely,  according  to  our  ideas,  in  their  style  of  living  and 
the  absence  of  luxuries,  but  possessed  comforts  in  food  and 
drink  and  were  experienced  in  aU  the  finer  domestic  arts 
and  customs.  This  was  the  old  world  at  the  end  of  its  days 
when  on  German  soil  Goethe  and  Mozart  appeared  as  its 
wonderful  offspring.  Nowadays  we  refer  to  the  remnant  of 
the  former  lower  stratum  of  these  fine  old  times  as 
"  illiterate,"  and  with  this  foreign  pedantic  word  dismiss 


112  CENTRAL  EUROPE 

them  from  the  ranks  of  still  vital  breeds.  In  North  Germany 
these  good  old  people,  the  illiterates,  have  almost  entirely 
died  out ;  they  can  hardly  now  be  found  even  in  the  most 
isolated  Polish  farm-houses ;  they  are  as  dead  as  gypsies, 
three-field  agriculture,  tilt  carts  and  wolves.  People  are 
generally  ashamed  that  only  a  short  time  ago  there  were 
men  amongst  us  here  who  could  not  write  their  own  names, 
although  we  are  well  aware  that  the  most  splendid  civilisa- 
tions from  Athens  to  Versailles  and  London  have  only  been 
possible  with  these  old  unlettered  folk  as  a  basis.  The 
normal  type  of  the  average  educated  man  appeared  in 
North  and  Middle  Germany  with  an  uncomfortable  intru- 
siveness,  a  type  the  hke  of  which  did  not  exist  in  the  older 
southern  and  western  civilisations.  In  the  Electorate  of 
Saxony,  in  Brandenburg,  and  also  on  either  side  of  the 
Mittelgebirge  in  Wiirttemberg,  the  process  of  transformation 
was  beginning.  Subsequently  the  French  and  English,  too, 
tried  to  become  educated  peoples,  but  it  did  not  altogether 
suit  them.  Compulsory  primary  education  always  works 
with  them  rather  like  an  imported  machine.  But  the 
development  of  an  educated  people  in  North  and  Central 
Germany  is  not  the  same  thing  as  the  development  of  the 
capitalist  spirit,  which  Professor  Sombart  discusses  in 
numerous  books.  Indeed  it  is  not  at  all  the  same,  since 
a  hundred  and  fifty  years  ago  the  provinces  of  which  we 
are  speaking  were  still,  as  far  as  capitalism  was  concerned, 
very  poor  outlying  districts,  and  were  in  no  sense  in  the 
forefront  of  the  movement.  As  princely  mercantilist  terri- 
tories they  desired  to  be  included  in  the  capitalist  com- 
munity, but  at  first  they  were  imitators  somewhat  as  the 
Balkan  States  are  to-day.  Nevertheless,  something  deve- 
loped in  them  which  in  course  of  time  was  to  outdistance  in 
method  and  efficiency  the  already  existing  capitaHstic  civilisa- 
tions of  earher  growth  ;  a  homely  skiU  in  the  popular  abihty 
to  transform  dreamers  into  workers  by  the  aid  of  letters  and 
memory  exercises.  Thus  there  grew  up  unconsciously  and 
involuntarily  the  basal  form  of  the  second  period  of  capi- 
talism :  a  mechanism  of  work  based  on  trained  and  educated 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE    113 

workers.  The  capitalist  employer  of  the  earlier  period 
developed,  as  Sombart  shows  us,  in  Upper  and  Central 
Italy,  France,  London  and  Amsterdam,  and  only  came 
thence,  like  some  foreign  imported  skill,  to  the  Central 
European  regions  beyond.  This  capitalist  finds  and  creates 
the  chief  centre  of  his  world  in  London.  From  his  stand- 
point there,  at  the  height  of  his  power,  he  threatens  the 
tjrpe  of  capitalism  that  wiU  succeed  him  :  the  new,  more 
impersonal  group  form  of  the  new  working  humanity  which 
began  as  individualist.  He  looks  on  Berhn  (and  in  a  some- 
what different  sense  New  York)  as  the  home  of  this 
dangerous  new  type.  A  careful  investigation  into  the 
causes  of  the  Great  War  wiU  reveal,  when  English-German 
antagonism  is  examined,  the  fundamental  difference  between 
the  two  distinct  basal  forms  of  capitalistic  humanity.  The 
capitalism  of  the  first  period  defends  itself  against  the 
capitalism  of  the  second  stage,  whose  advent  is  being 
proclaimed,  the  discipHned  normal  capitaUsm  of  Germany. 
The  latter  is  to  the  former  in  its  very  essence  insupportable. 
But  for  what  reason  have  Saxony,  Brandenburg,  Wiirttem- 
berg  and  later  in  a  higher  degree  Rhenish  Westphalia, 
Hamburg,  the  Middle  Rhine  districts  and  gradually  the 
whole  of  Germany  become  the  home  of  this  new  human 
t5^e  which  is  still  in  process  of  formation  ?  This  point 
deserves  consideration  and  must  be  understood  if  we  are 
to  explain  the  character  of  Mid-Europe  and  the  part  it 
should  play  in  the  world.  What  is  this  economic  Prus- 
sianism  and  Germanism  which  to-day  enforces  the  attention 
and  arouses  the  aversion  of  the  world,  and  how  did  it  come 
about  ?  What  is  the  origin  of  our  new  social-economic 
creed  ? 


During  the  war  we  are  all  wondering  why  we  Germans, 
and  especially  we  Germans  of  the  Empire,  are  so  little 
beloved  by  the  rest  of  the  world.  To  many  well-meaning 
and  sociable  people  this  international  dislike  is  something 
quite  horrible,  and  they  rack  their  brains  to  discover  what 


114  CENTRAL  EUROPE 

we  must  do  in  order  to  find  favour  again.  But  they  often 
look  for  the  source  of  the  ill-will  of  other  nations  in  very 
secondary  matters,  such  as  perhaps  in  the  lack  of  social 
good  tone  in  those  who  travel  abroad,  loud-voiced  German 
tourists  dressed  in  Tyrolese  homespun,  or  in  the  theatrical 
sword-clanging  of  some  discharged  general,  and  not  in  the 
economic  national  type  itself,  because  they  share  in  the 
economic  and  mental  changes  in  their  own  nation  much  too 
unconsciously.  It  hardly  even  occurs  to  them  that  we  are 
unloved  because  we  have  found  a  method  of  work  in  which 
now  and  for  a  long  time  to  come  no  other  European  nation 
can  imitate  us,  and  which  consequently  the  others  do  not 
regard  as  fair.  It  is  this  to  which  we  have  just  referred  as 
the  transition  to  the  impersonal  capitalism  of  the  second 
stage,  a  process  which  with  us  has  demanded  about  a 
century  and  a  half  of  work  and  education. 

In  order  by  illustration  to  make  clearer  at  the  outset  the 
distinction  between  the  older  and  the  newer  economic 
creed  of  capitalism  I  will  begin  with  a  little  story  about 
London.  I  wanted  to  look  at  the  London  docks,  and  said 
so  to  a  respected  English  friend,  whom  in  spite  of  the  war 
I  greet  from  across  the  trenches.  He  replied,  "  No  one  here 
goes  to  look  at  the  docks  !  "  Then  I  inquired  at  the  Inter- 
national Tourist  Offices  of  Cook  and  Son  whether  they 
arranged  for  visits  to  the  docks  ?  Answer  :  No,  because 
there  were  no  London  docks  like,  for  instance,  the  Hamburg 
docks,  which  one  could  visit  and  inspect  as  a  whole ;  the 
London  docks  are  an  unsystematic  succession  of  many  very 
big  estabhshments,  each  of  which  belongs  to  a  separate 
private  firm.  Thus,  as  to  quantity,  labour,  money  value, 
goods,  the  London  shipping  trade  exceeds  that  of  Hamburg  ; 
but  as  to  unity,  articulation,  organisation  they  already 
represent  a  more  antiquated  form  of  life.  Hamburg  learned 
from  London,  but  added  to  its  learning  quite  of  itself 
something  pecuUarly  German,  which  at  the  outset  appeared, 
like  some  chance  additional  characteristic,  merely  as  stricter 
police  supervision  and  regulation,  but  which  developed  in 
course  of  time  into  an  essential  feature.     Why,  we  ask. 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE  115 

does  the  smaller  German  sea  trade  possess  the  greatest 
shipping  companies  ? 

Or  another  example :  in  1900  I  was  in  Paris  during  the 
Exhibition  and  was  talking  to  a  German  wood-carver  (fine 
joiner),  who  had  worked  for  a  long  time  in  France,  about  the 
difference  between  Germans  and  French.  The  man,  so  far 
as  I  can  remember  now  after  fifteen  years,  spoke  somewhat 
thus :  If  a  French  joiner  has  thirty  workmen  and  can  get 
a  larger  order  employing  more  than  this  number,  he  accepts 
it  indeed,  but  puts  it  out  on  conunission,  because  he  has 
not  sufficient  confidence  in  himself  or  will  not  take  the 
trouble  to  deal  with  more  than  thirty  workmen.  Meanwhile 
the  corresponding  German  employer  would  accept  the  order 
for  himself,  would  enlarge  his  workshop,  and  by  reason  of 
this  enlargement  would  seek  further  new  orders.  If  one  of 
the  Frenchmen  acts  differently,  then  he  is  certain  to  be 
from  Alsace  or  Switzerland.  Thus  the  Germans  have  the 
greater  organising  ability  both  in  medium-sized  businesses 
and  in  skilled  handwork. 

The  pecuHarity  of  the  Germans  does  not  consist  in  an 
essentially  new  attribute  which  has  not  appeared  elsewhere 
in  the  world,  but  in  the  methodical,  trained  progress  in  an 
abiUty  which  has  existed  and  does  stUl  exist  among  the 
hitherto  leading  nations,  but  has  not  been  so  systematically 
and  intentionally  developed.  From  our  own  point  of  view 
we  are  still  a  long  way  from  having  arrived  at  perfection  of 
organisation,  but  in  the  eyes  of  others  we  have  already 
deviated  far  from  their  style  of  Uving.  We  are  an  unfree 
people  because  we  have  learnt  better  than  they  have  how 
to  carry  out  our  work  on  a  common  plan  and  to  a  common 
rhjrthm.  And  this  appUes  to  all  types  of  work.  It  is  not 
as  if  industriahsm  were  a  special  German  characteristic,  for 
the  EngUsh  are  an  industrial,  machine-using,  manufacturing 
nation,  and  were  so  before  us.  Moreover,  the  peculiar 
German  spirit  of  which  we  are  speaking  shows  itself  at  least 
as  much  in  our  agricultural  occupations  as  in  our  manu- 
factures. 

Of  course  there  are  all  sorts  of  attempts  at  organisation 


ii6  CENTRAL  EUROPE 

and  co-operation  in  English  and  French  agriculture,  as  for 
example  among  the  wine-growers  in  Southern  France.  But 
when  examined  closely  these  attempts  are  nearly  all  quite 
feeble,  whereas  German  agriculture,  although  the  indepen- 
dence of  the  peasantry  is  definitely  safeguarded,  is  already 
almost  entirely  managed  by  systematic  co-operation,  or  at 
least  is  making  daily  progress  towards  this  goal.  By  the 
joint  action  of  agricultural  boards,  agricultural  schools,  loan 
banks,  granaries  and  dairies,  a  strong  net  is  woven  round 
the  individual.  He  has  become  a  peasant  co-operator, 
member  of  a  definite  profession.  He  can,  no  doubt,  evade 
all  these  regulations,  but  it  is  to  his  own  injury  if  he  does 
so.  For  the  sake  of  personal  interest  he  becomes  a  member 
of  an  impersonal  institution  and  works  for  it  as  for  himself. 
This  insertion  of  the  individual  ego  into  the  joint  ego  is  our 
special  ability  by  which  we  attain  a  more  intensive  cultiva- 
tion, a  better  assorted  production,  and  better  marketing 
quahties  for  international  trade.  Individualism  is  fully 
developed,  but  it  is  then  carried  up  into  the  next  higher  form 
of  economic  co-operative  existence. 

Owing  to  a  hke  intrinsic  impulse  our  industrial  Hfe  is 
similarly  full  of  ideas  of  organisation  and  regulations  for 
combines.  I  mean  to  speak  elsewhere  of  the  economic 
syndicates  or  cartels,  so  that  here  I  will  merely  call  attention 
to  the  fact  that  during  the  last  twenty  years  our  German 
industries  have  taken  on  an  entirely  new  appearance.  In 
growing  they  have  become  interlaced.  By  means  of 
employers'  federations,  payment  cartels,  zone  compacts,  and 
price  agreements,  a  comphcated  machinery  of  spheres  of 
business  and  subordinations  has  come  into  being,  in  which 
the  outsider  can  hardly  find  his  way,  but  which  has  been 
created  step  by  step  as  needed,  and  by  means  of  which  the 
private  employer  of  the  old  style  has  quite  gently  sHpped 
over  into  the  disciphned,  industrial  community,  and  that  in 
the  course  of  one  generation  and  even  when  at  the  outset  he 
was  quite  unwilling.  He  has  become  a  federated  employer. 
The  employers  of  the  first  and  second  generations  perhaps 
only  adapted  themselves  reluctantly  to  these  developments 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE  117 

and  would  rather  have  remained  individualist  capitalists  in 
the  West  European  sense,  but  the  employer  of  the  third 
generation  is  for  the  most  part  born  into  a  combination  from 
the  outset.  Thus  in  a  certain  sense  he  becomes  the  free, 
directing  employee  of  a  society  which  produces  steel  or  yarn 
or  sugar  or  spirits.  The  industrial  basis  of  the  age  is  thus 
discovered,  and  its  spirit  is  now  steadily  penetrating  deeper. 
In  another  twenty  years  we  shall  see  before  us  the  whole 
scheme  of  a  powerful  industry  with  its  domestic  regulations 
and  its  divisions  of  labour.  The  regulation  of  production  is 
on  the  way.  Things  that  forty  years  ago  would  have 
seemed  like  the  unreal  idealism  of  socialist  and  state- 
socialist  dreamers,  now  appear  with  incredible  certainty  as 
realities  which  have  come  into  being  in  the  interval. 
Germany  is  on  the  way  to  become  not  merely  an  industrial 
State,  but  above  all  an  organised  State. 

In  complete  correspondence  with  this  is  our  experience 
with  the  wage-earners,  and  following  their  example,  with 
aU  the  employees  in  the  higher  groups.  The  old  ideal  of 
the  individual  who  sells  his  working  strength  when,  where 
and  how  he  Ukes  has  almost  disappeared  in  the  social  ideal 
of  the  common  unions  of  wage-earners  and  workers.  The 
non-unionist  is  still  numerous  it  is  true,  but  he  is  in  no  way 
the  leader.  And  what  distinguishes  the  German  trade 
unionist,  so  far  as  we  can  see,  from  the  older  English  type, 
is  his  greater  coherence  and  discipUne,  which  he  has  pain- 
fully but  successfully  won  by  fighting,  in  spite  of  socialistic 
law  and  poUce  intrigue,  against  the  poUcy  of  the  Government 
and  of  the  employers.  The  German  masses  mean  to  make 
their  advance  as  organised  groups,  that  is  their  guiding 
principle.  It  is  inadequate  to  say  that  they  combine  in  order 
to  obtain  increased  wages.  Any  one  who  knows  the  unionists 
knows  that  calculated  self-interest  is  only  one  side  of  their 
existence,  and  that,  especially  in  the  case  of  the  leaders,  it  is 
the  least  decisive  influence.  They  have  formed  their  trade 
unionist  ideal  of  conduct,  narrow  and  inflexible,  as  could 
hardly  be  otherwise  with  people  of  moderate  means  who  have 
but  little  scope  for  action  in  their  lives,  but  yet  firmly  decided 


ii8  CENTRAL  EUROPE 

upon  and  definite  in  itself.  The  idea  of  a  super-personal 
economic  leadership  of  the  masses  in  work  and  in  the  sale  and 
consumption  of  its  products  is  prevalent  and  becomes  a  mere 
matter  of  course.  In  this  the  German  working  classes  differ 
from  all  the  Latin  nations,  for  what  in  France  and  Italy  is 
called  sociahsm  is  indeed  related  in  word  and  theory  to  the 
German  workmen's  unions,  but  has  none  of  the  sternness 
of  inward  determination  which  has  been  attained  by  our 
social  democrats,  or  even  by  other  unionist  groups. 

All  travel  along  the  same  path  :  engineers,  teachers,  head- 
teachers,  scholars,  doctors,  even  artists.  The  guilds  of 
handworkers  are  coming  to  life  again  and  adapting  them- 
selves to  the  altered  conditions  of  the  time.  We  are  a 
uniform  nation  in  spite  of  all  the  quarrels  among  the 
numerous  associations  of  opposing  interests  ;  magnificently 
uniform  in  this  method  of  organising  our  daily  Hfe  and 
work.  Primary  schools,  universal  conscription,  poUce, 
science  and  sociahstic  propaganda,  have  all  worked  together 
to  this  end.  We  were  hardly  aware  that  we  desired  aU  this 
in  reahty :  this  discipHned  work  of  the  second  period 
of  capitaUsm,  which  may  be  described  as  the  transition 
from  private  capitaHsm  to  socialism,  if  the  word  socialism 
be  not  appUed  solely  to  a  proletarian  vision  of  great  busi- 
nesses, but  is  understood,  broadly,  as  an  ordering  of  the 
nation  for  the  increase  of  the  joint  product  of  each  for 
aU. 

This  new  German  type  is  incomprehensible  to  the  indi- 
viduahst  nations,  to  whom  he  appears  partly  as  a  relapse 
into  past  times  of  constraijit,  and  partly  as  an  artificial 
product  of  coercion  that  belies  and  overcomes  humanity. 
In  educated  circles  in  Paris  and  London  they  feel  a  mixture 
of  pity,  fear,  respect  and  aversion  towards  this  German 
type.  Even  if  they  could  produce  the  same  thing  there, 
they  would  not  wish  to  do  so,  for  they  have  no  desire  for 
this  discipUned  soul,  they  do  not  desire  it  because  it  would 
be  the  death  and  the  surrender  of  the  individual  soul.  No 
one  can  quite  understand  this  unless  he  has  occasionally 
tried  to  look  at  Germany  with  the  eyes  of  a  foreigner.     To 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE    119 

the  German  who  knows  only  Germany,  the  intrinsic  strength 
of  this  opposition  must  necessarily  remain  hidden ;  he  does 
not  reaUse  how  strange  he  has  already  become  to  even  the 
best  men  of  the  Western  nations,  not  owing  to  any  particular 
thing  which  he  does  but  merely  owing  to  what  he  is. 


This  new  German  character  has  by  no  means  been  pro- 
duced amongst  us  in  the  German  Empire  without  opposition, 
for  it  is  something  distinct  from  the  old  German  condition 
of  Hfe  and  heart.  The  old  German  was  much  more  natural, 
slower,  wilder  or  weaker  just  as  it  happened.  All  our 
Romanticism  lacks  the  organising  spirit ;  it  is  loyal,  self- 
sacrificing  and  companionable,  but  it  is  wanting  in  any 
guiding  idea  of  aim.  The  good,  ridiculous  Germans  of 
former  days  were  thus  no  objects  of  general  enmity. 
People  thought  of  them  at  times  as  coarse,  and  wished  they 
had  a  larger  share  of  French  poUteness,  but  they  had  at 
bottom  nothing  against  the  worthy  bears,  who  let  themselves 
be  pushed  hither  and  thither  and  yet  laughed  at  it  them- 
selves. But  no  one  ever  supposed  that  this  old,  com- 
fortably coarse,  downright  fellow  would  one  day  shake  off 
his  dream  and  stand  up  as  the  thinker  of  labour.  Even 
when  philosophers  of  the  highest  rank  appeared  amongst 
us  foreigners  never  thought  that  this  signified  a  practical 
and  economic  change  in  the  German  character.  Indeed  we 
hardly  noticed  ourselves  how  much  our  philosophers  were 
practical  prophets.  They  were  regarded  as  artists  in  ideas 
and  as  reformers  of  the  world,  without  its  being  realised  that, 
emanating  from  them,  a  spirit  of  labour  inspired  by  reason 
would  transform  the  entire  world  in  the  course  of  a  century. 
Indeed  the  thinkers  themselves  did  not  perceive  to  what 
purpose  they  were  there.  They  thought  about  pure  and 
practical  reason  in  the  sense  of  intellect  and  morality.  But 
after  them  came  their  followers  and  tried  to  introduce 
the  reason  they  conceived  of  into  Government,  Law  and 
Administration.  They  were,  it  is  true,  only  partially 
successful,  but  again,  in  the  next  generation,  keen,  highly 


120  CENTRAL  EUROPE 

trained  thinkers  about  actual  possibilities  were  found  in  all 
departments  of  work.  Neither  Bismarck  nor  Savigny  nor 
Helmholz  nor  either  of  the  two  Siemens  is  conceivable 
without  this  philosopher's  oil  poured  out  for  the  second  and 
third  time.  Our  technical  and  agricultural  schools  are 
German  institutions  for  thought  which  aims  at  realisation 
in  fact,  and  are  nowadays  almost  more  characteristic  of  our 
national  nature  than  the  old-established  universities.  The 
"  high  school "  with  a  practical  object  is  a  novelty  which  we 
first  had  to  assimilate  ourselves,  and  which  the  people  of 
older  civilizations  most  heartily  grudged  us  when  it  appeared, 
because  for  them  knowledge  was  more  an  amusement  than 
a  practical  ability. 

In  the  quite  recent  past,  and  until  our  character  was  thus 
transformed  in  this  matter  of  technical  organisation,  the 
English  were  always  very  friendly  to  us  Germans.  The  great 
EngUsh  thinker  Carlyle,  it  is  true,  understood  what  was  pre- 
paring in  the  German  spirit,  but  his  fellow-countr5rraen  ac- 
cepted what  they  saw  before  their  eyes  :  the  Germans  have 
good  schools  and  buy  EngHsh  machinery  !  It  was  not  until 
by  reason  of  their  schools  they  set  up  their  own  machines  and 
offered  them  to  foreign  nations  that  they  lost  the  EngUsh 
goodwill ;  for  how  could  the  learned  brother  on  the  Continent 
be  so  bold  as  to  mix  himself  up  in  business  ?  This  learned 
German  technical  scholar  appeared  in  all  occupations  Hke 
something  essentially  improper.  The  old  English  world  was 
not  adapted  to  make  a  systematic  working  aUiance  between 
thought  and  international  trade  !  From  the  time  of  this 
memorable  change  onwards  the  educated  Englishman  felt 
himself  deceived  by  the  German  and  called  him  a  dangerous 
competitor,  as  indeed  he  really  was,  and  that  too  in  virtue 
of  the  English  universal  watchword ;  free  play  for  the 
strong  ;  but  with  a  quite  differently  trained  strength.        • 

How  closely  the  new  German  method  of  work  is  a 
continuation  of  the  German  trained  thought  can  only  be 
realised  from  a  comparison  between  German  management 
of  important  undertakings  by  leading  men  and  the  corre- 
sponding foreign  non-German  management.     Our  financial 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE    121 

policy  has  a  perceptible  doctrinaire  tendency,  but  on  this 
very  account  is  most  successful.  Our  military  education  is 
markedly  scientific,  but  is  not  injured  thereby.  Our  great  mer- 
chants are  almost  economists  and  statisticians  by  profession. 
Our  woodcraft  is  almost  as  logically  thought  out  as  a  textbook 
on  grammar.  Our  shipbuilding  is  highly  mathematical,  our 
steel  plates  are  scientific  works,  our  dyes  are  chemical  in- 
ventions. Into  everything  there  enters  to-day  less  of  the 
lucky  spirit  of  invention  than  of  patient,  educated  industry. 
Or  to  put  it  otherwise  :    we  believe  in  combined  work. 

That  connection  with  systematic  science  which  we  find 
throughout  in  the  new  agriculture  and  in  all  the  more 
extensive  industrial  undertakings  was  and  stiU  is  the 
pecuhar  quality  of  German  social  democracy.  Dr.  Engels, 
the  friend  of  Karl  Marx,  said  of  it  that  it  was  the  heiress  of 
German  philosophy,  and  if  the  sa5dng  is  not  taken  to  mean 
the  sole  heiress,  then  there  is  a  large  kernel  of  truth  in  it. 
Of  all  working  classes,  only  the  German  (and  the  German- 
Austrian)  is  theoretical  in  its  group  instruction  in  the  sense 
of  pure  Marxism.  This  instruction  may  often  be  false  in 
details  and  may  be  far  over  the  pupils'  heads,  and  remote  from 
present-day  problems,  but  the  actual  fact  that  we  possess 
the  most  theoreticcd  labour  movement  in  the  world  is  part 
o£  the  picture  of  German  economic  Ufe.  This  working  class 
in  combination  with  its  educated  employers,  with  our 
S5mdicate  leaders,  with  our  Civil  Service  and  ofiicers,  does 
not  offer  the  most  charming  and  amusing  society  possible, 
but  does  constitute  the  most  practical,  safe  and  durable 
human  machinery.  This  Uving  national  machine  goes  its 
way  whether  the  individual  Hves  or  dies,  it  is  impersonal  or 
super-personal,  has  its  frictions  and  interruptions,  but  is  as 
a  whole  something  that  has  never  come  to  pass  exactly  in 
this  way  before  ;    it  is  the  historically  developed  German 

character. 

****** 

We  are  all  being  much  confirmed  in  this  our  German 
method  of  work  by  the  progress  of  the  war.  From  the  very 
first  days  thjs  war,  which  had  been  forced  upon  us,  was 


122  CENTRAL  EUROPE 

regarded  as  a  necessary  and  quite  universal  duty  and  task 
which  must  be  performed.  Every  one  looked  to  those  in 
responsible  positions  for  a  planned  organisation  reaching 
even  to  the  smallest  details.  As  soon  as  it  was  felt  that 
this  existed,  the  troops  and  the  workers  at  home  showed 
themselves  ready  for  the  greatest  and  most  exceptional 
efforts,  without  crediting  themselves  with  this  as  any 
special  merit.  The  war  was  really  only  a  continuation  of 
our  previous  Ufe  with  other  tools  but  based  on  the  same 
methods.  In  this  indeed  Ues  the  secret  of  success.  We 
conquer  less  through  individuals  than  through  the  disciplined 
feehng  for  combined  difficult  work,  and  those  who  take  the 
field  to  amend  us  after  their  own  pattern  must  try  in  battle 
to  equal  us.  If  our  opponents  hke  to  label  this  intrinsic 
connection  between  the  work  of  war  and  peace  as  "  German 
mihtarism,"  we  can  only  regard  this  as  reasonable,  for 
Prussian  military  discipUne  influences  us  all  in  actual  fact, 
from  the  captain  of  industry  to  the  maker  of  earthworks. 
All  that  we  object  to  is  the  secondary  implication  which  has 
associated  itself  with  the  word  militarism,  and  which  in  the 
management  of  barracks  in  the  peace  years  it  was  difficult 
entirely  to  avoid.  But  after  the  war  we  shall  certainly 
remain  much  more  closely  agreed  in  our  common  esteem  for 
the  voluntary  discipline  of  a  great  national,  miUtary  or 
industrial  army  so  long  as  the  men  are  stiU  Uving  who  have 
kept  at  their  posts  during  this  struggle.  Happen  what  will 
the  German  spirit  has  received  its  baptism  of  fire  :  the 
national  genius  was  and  is  a  reaUty.  Both  to  ourselves  and 
to  the  outside  world  we  have  shown  ourselves  as  in  essence  a 
single  unit.  Now  it  is  our  concern  to  carry  through  to  its 
goal  this  essential  German  character,  proved  in  the  most 
sinister  of  wars.  This  wiU  and  must  be  set  on  foot  directly 
peace  is  concluded. 

For  on  this  day  all  Imperial  and  State  officials  and  all 
parties  and  societies  will  produce  their  memoranda  wherein 
are  noted  the  things  that  must  be  altered  after  the  war.  I 
wager  that  three-fourths  of  these  memoranda  will  contain 
the  words  :    better  organisation  !     Our  foreign  service,  our 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE   123 

Red  Cross,  our  hospital  system,  our  military  clothing,  our 
military  purveying,  our  horse-breeding,  our  food-supply,  all 
this  and  much  else  must  be  much  more  rigidly  thought  out 
and  calculated  for  beforehand,  so  that  we  shaU  not  again 
be  so  situated  as  now  in  the  ill-advised  debates  on  food. 
But  aU  organisation  consists  in  statistics,  grouping,  analysis, 
S5mthesis,  control  and  regulation,  and  thus  there  grows  up 
from  all  sides  a  State  or  national  sociaUsm,  there  grows  up 
the  "  systematised  national  economy."  Fichte  and  Hegel 
nod  approval  from  the  walls  :  now,  after  the  war,  the 
German  is  at  last  becoming  heart  and  soul  a  poHtical 
economic  citizen.  His  ideal  is  and  will  be  the  organism  and 
not  free  will,  reason  and  not  the  bUnd  struggle  for  existence. 
This  constitutes  our  freedom,  our  self-development.  By  its 
means  we  shall  enjoy  our  golden  age  as  other  conquering 
nations  in  other  ages  and  with  other  abiUties  and  excellences 
have  done  before  us.  Our  epoch  dawns  when  Enghsh  capi- 
taUsm  has  reached  and  overstepped  its  highest  point,  and  we 
have  been  educated  for  this  epoch  by  Friedrich  II.,  Kant, 
Schamhorst,  Siemens,  Krupp,  Bismarck,  Bebel,  Legien, 
Kirdorf  and  BaUin.  Our  dead  have  fallen  on  the  field  for 
the  sake  of  this  our  Fatherland.  Germany,  foremost  in  the 
world ! 

And  now  let  us  return  to  Mid-Europe.  The  German 
economic  creed  must  become  in  future  more  and  more  the 
characteristic  of  Mid-Europe.  The  miUtary  defensive  alli- 
ance will  thus  grow  into  a  genuine  partnership.  A  united 
economic  people  will  develop,  cutting  across  all  constitu- 
tional boundaries. 

This  could  not  succeed  were  it  the  freshly  conceived 
scheme  of  individuals.  But  we  are  only  putting  into  words 
what  has  for  long  been  taking  shape  of  itself ;  we  express  it 
in  order  to  fmrther  a  process  that  is  already  going  on.  The 
Austrians  and  Hungarians  have  already  had  a  share  in  our 
life  for  economically  they  are  of  our  race,  even  those  who 
speak  a  different  language.  The  German- Austrians  sat 
with  us  on  the  same  school  benches  and  have  suppUed  us 


124  CENTRAL  EUROPE 

with  excellent  fellow-workers  and  teachers  of  the  same 
technical  training  and  outlook.  The  Tzechs  or  Poles  or 
Magyars  may  indeed  often  be  anti-German  and  uncongenial 
to  us  in  actions  and  feehngs  unconnected  with  business,  but, 
all  the  same,  they  have  not  escaped  the  attraction  of  our 
working  methods,  and  have  not  even  thought  of  doing  so. 
France  was  for  them  the  ideal  country  of  the  finer  arts, 
England  the  technical  and  financial  queen  of  the  world  aloof 
from  Continental  struggles,  Russia,  perchance,  the  mysterious 
future  Power  of  unhmited  possibilities,  but  the  economic  life 
of  aU  the  Austro-Hungarian  nations  and  sections  of  races  is 
quite  overwhelmingly  of  German  origin.  They  have  bor- 
rowed their  international,  technical  and  business  development 
from  the  Germans,  often  without  being  especially  conscious 
of  it  or  desiring  it.  Often  the  German-speaking  Jews  have 
acted  as  intermediaries.  Their  co-operation  is  not  to  be 
underestimated,  for  whatever  banks,  joint-stock  companies, 
means  of  communication,  corn  warehouses,  wood  consign- 
ments and  even  manufactures  exist  in  Austria-Hungary  are 
workable  amongst  all  the  separate  nationahties  chiefly 
because  the  PoUsh,  Magyar,  Tzech  and  German  Jews  are 
accustomed  to  a  mutual  understanding.  In  spite  of  all  the 
protests  of  the  Anti-Semites  the  Jews  are  an  indispensable 
factor  in  the  economic  Hfe  of  the  Dual  Monarchy.  No  doubt 
to  most  of  them  the  kernel  of  mihtary  organisation  pecuhar 
to  the  German  economic  character  is  unknown,  but  they 
are  born  teachers  of  commercialism  as  such,  and  thus  they 
prepare  the  way  and  make  ready  for  modern  work. 

It  would  be  quite  erroneous  for  any  North  German  to 
think  himself  called  upon  to  introduce  the  first  elements  of 
capitaUst  theory  to  the  Southern  members  of  the  union. 
Indeed  he  might  put  his  foot  into  it  thereby,  for  the  Budapest 
com  traders,  the  Vienna  bankers,  the  Bohemian  manufac- 
turers are  truly  no  growths  of  yesterday.  Good-natured  as 
they  may  seem  they  are  very  good  men  of  business.  In  all 
these  matters  the  North  German  must  not  forget  that  though 
he  is  better  organised  he  is  no  cleverer  than  his  Southern  neigh- 
bour.    The  two  things  are  not  quite  the  same.     The  amazing 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE    125 

economic  vigour  of  the  North  is  no  pure  outcome  of  intellect 
if  this  is  understood  as  a  general  versatility  of  mind.  The 
successful  North  Germans  are  often  not  so  specially  active 
intellectually,  but  they  are  tenacious  and  stick  to  a  thing 
and  force  themselves  and  others  into  systematic  progress. 
In  this  Ues  their  strength.  We  are  concerned  with  the  prob- 
lem of  combining  this  strength  and  the  versatile  quaUties 
of  the  Danubian  State  into  a  Central  European  economic 
system  to  the  common  profit,  and  of  developing  out  of  nature, 
tradition  and  breeding  a  successful  scheme  of  joint  work. 
****** 

In  discussing  these  matters  with  German-Austrians  I 
have  frequently  heard  the  phrase,  "  You  must  help  us." 
But  when  I  have  tried  to  translate  this  recurrent  demand 
into  practical  measures,  there  was  a  standstill.  For  it  was 
generally  quite  uncertain  at  what  point  and  with  what 
objects  they  were  to  be  helped.  Then  it  was,  "  Oh  well, 
you  must  give  the  starting  push  !  "  "  Yes,  but  if  we  do 
that  you  will  be  the  first  to  resent  it !  "  "Oh  well,  that  is 
true,  but  all  the  same  we  can't  get  out  alone."  Then, 
without  further  circumlocution  :  what  is  it  these  Austrians 
want  to  get  out  of  ? 

As  individuals  they  are  quite  as  clever  and  as  skilful  in 
business  and  profession  as  any  of  us  and  they  generally 
know  our  business  affairs  better  than  we  do  theirs.  In 
details  we  could  more  often  learn  from  them  than  they 
from  us.  All  that  they  lack  is  any  general  manifestation  of 
that  Prusso-German  business  spirit  described  above.  They 
do  not  exactly  desire  this  but  they  would  Uke  to  enjoy  its 
fruits,  for  they  see  that  it  makes  for  prosperity  and  strength, 
and  that  for  the  entire  nation.  Individuals  have  become 
exceedingly  rich  as  often  on  the  Danube  as  on  the  Spree, 
both  in  the  old  aristocratic  and  in  the  modem  capitalist 
periods.  But  as  a  whole  there  are  obstacles  to  the  economic 
Ufe  there,  about  which  even  the  best  of  friends  cannot  be 
silent.  The  productivity  of  the  land  in  Austria  and  Hungary 
is  less  developed  than  it  ought  to  be  with  modern  expedients 
and  in  relation  to  the  value  of  the  soil  and  the  amount  of 


126  CENTRAL  EUROPE 

the  population.  It  is  not  as  if  Austro-Hungarian  agriculture 
made  no  progress !  On  the  contrary  it  does  progress, 
becomes  more  productive  and  more  varied,  but  it  does  not 
quite  keep  pace  with  Germany  in  front,  nor  with  the  pressure 
of  the  smaller,  developing  nations  behind.  Bohemia  indeed 
is  almost  like  the  Germany  on  its  borders,  but  the  further  one 
goes  into  the  centre  and  east  of  the  Danube  countries  the 
more  are  there  leaden  weights  on  the  feet  of  those  who  try 
to  advance.  There  is  still  much  unassisted  poverty,  much 
wasted  effort,  much  red  tapeism  without  any  proper  object. 
All  this  is  burdensome  and  is  sometimes  felt  as  a  reproach, 
and  only  a  few  strong-minded  persons  can  rise  above  these 
feelings  and  go  their  way  boldly  and  successfully.  Thus  it 
appears,  to  me  at  least,  that  the  economic  system  of  the 
Danubian  Kingdom  is  wanting  less  in  something  technical 
which  might  easily  be  introduced  into  it,  than  in  something 
psychical  which  must  first  be  trained,  and  which  is  needed 
just  as  much  by  the  farmers  as  by  the  craftsmen  and  artisans, 
and  just  as  much  by  the  employers  as  by  the  workpeople. 
I  should  partially  fail  to  carry  out  the  purpose  of  this  book 
of  mine  if,  owing  to  a  natural  and  easily  understood  caution, 
I  were  not  prepared  to  speak  frankly  in  this  connection. 
Such  matters  only  cease  to  be  painful  when  they  are  stated 
in  plain  terms. 

I  once  travelled  with  a  German-speaking  Ruthenian  from 
Oderberg  to  Breslau,  and  enjoyed  his  ready  grasp  of  what 
was  to  him  the  new  Ufe  on  either  side  of  the  railway.  He 
said  something  of  this  sort :  "  What  surprises  me  is  that 
here  the  peasants  are  really  human  beings."  Of  course 
from  the  railway  he  could  not  see  how  many  troubled  and 
oppressed  existences  there  were  even  in  Silesia,  and  that 
frequently  both  in  agricultural  and  town  occupations,  and 
how  httle  the  position  there  to-day  corresponds  to  our  ideal 
of  the  upraising  of  the  whole  nation.  But  all  the  same  it  is 
true  that  the  people  whom  one  sees  at  the  station  buildings 
over  there  in  Galicia  or  in  Hungary,  on  either  side  of  the 
Carpathians,  make  a  quite  different  impression  as  less  cared 
for  and  less  independent. 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE    127 

To  express  the  same  point  in  other  words :  A  few  weeks 
ago  I  heard  an  Austrian  economist  remark  :  "  With  us 
two-thirds  of  the  population  are  beggars."  He  did  not  say 
proletarians  but  beggars,  and  he  was  weU  aware  of  the 
distinction  between  the  two  words,  I  will  leave  it  an  open 
question  whether  or  no  the  estimate  of  two-thirds  was 
exaggerated,  but  it  remains  true  that  almost  ever5Avhere, 
and  of  course  especially  in  the  east,  one  meets  with  men 
and  women  who,  so  to  speak,  never  escape  from  their  rags 
their  whole  Hfe  long.  These  people  own  Uttle  and  can  do 
Uttle,  they  drag  along  from  one  day  to  another,  and  are 
remarkably  moderate  in  their  demands  on  themselves  and 
on  the  rest  of  the  world  and  society.  From  the  economists' 
standpoint  they  cuid  their  work  are  not  actually  worth 
much  more  than  the  few  kronen  which  pass  through  their 
hands,  but  it  would  be  possible  to  make  them  much  more 
valuable.  This  is  the  problem.  We  Germans  of  the 
Empire  know  this  problem  for  ourselves,  but  we  have 
already  partially  chmbed  the  mountain,  we  have  got  over 
the  roughest  parts,  and  hence  the  Austrians  say  to  us : 
"  You  must  help  us  !  " 

Why  do  so  many  people  emigrate  ?  As  many  as,  or 
more  than,  170,000  men  emigrated  overseas  from  Austria  in 
a  few  years,  and  many  others  went  across  the  land  frontiers. 
In  1907  193,000  even,  emigrated  from  Hungary.  It  is  true 
that  a  certain  proportion  of  the  emigrants  come  back  again, 
but  in  exchange  fresh  troops  of  them  are  always  hoisting  their 
bimdles  on  their  backs  and  going  to  look  for  bread  and 
money  in  Europe  or  America.  We  too  have  known  this 
emigration  in  earher  times  in  East  and  West  Prussia, 
Saxony,  Wiirttemberg,  the  Palatinate  and  elsewhere,  and 
even  in  the  last  century  in  the  early  eighties  we  lost  a  large 
number  of  our  people  through  emigration  to  America,  but 
we  have  got  over  the  difficulty.  This  final  jerk  over  is  still 
needed  in  Austria  and  Hungary.  It  must  come  however, 
for  it  is  poor  comfort  that  the  emigrants  send  or  bring 
home  money.  A  good  economic  system  does  not  need  to 
cast  out  its  children  but  acts  as  an  attraction,  and  keeps  the 


128  CENTRAL  EUROPE 

superfluous  ones  itself  to  increase  home  industry.  The 
Danube  country  too  must  cease  to  act  as  a  nursery  for 
foreign  nations. 

A  social  policy  is  good  and  necessary,  but  first  and  above 
all  there  must  be  employment.  I  remember  still  how 
things  appeared  in  the  Saxon  Erzgebirge  when  I  was  a 
child.  First  one  family  and  then  another  could  endure  it 
no  longer,  and  packed  up  their  scanty  possessions.  And 
they  wpre  always  the  most  efficient,  for  the  under-nourished 
and  the  poor-blooded  can  never  get  away.  Thus  fifty  years 
ago,  healthy  people  were  quite  literally  in  beggary  there. 
I  tell  this  purposely  so  that  no  one  can  feel  that  my  previous 
statements  were  made  in  a  pharisaical  spirit.  Nothing  is 
further  from  my  thoughts.  But  when  I  think  about  Mid- 
Europe,  I  do  not  only  think  of  kings,  courts  and  general 
superintendents,  but  of  the  whole  immense  crowd,  of  our 
combined  great  nation  in  all  its  ranks,  and  I  consult  with 
the  economists  of  neighbouring  lands  to  devise  how  things 
may  be  improved.  For  it  is  only  by  means  of  healthier, 
better-educated  and  better-nourished  masses  that  the 
miUtary,  financial  and  civilised  Mid-Europe  of  which  we 
dream  can  come  into  existence. 


It  is  not  of  much  use  to  hold  moral  discussions  and  talk 
compassionately  about  the  poverty  of  the  masses,  for  they 
will  get  no  better  fed  or  stronger  in  consequence.  Even  the 
school  is  not  by  itself  adequate  to  the  task,  however  indis- 
pensable it  is.  The  primary  school  transforms  a  homely  but 
helpless  population  of  illiterates  into  arithmeticians,  letter- 
writers  and  newspaper  readers.  It  enlarges  the  sphere  of 
activity  and  supplies  a  basis  for  further  progress,  but  it 
cannot  supply  work  in  a  district  where  employment  is 
scarce.  The  most  enterprising  boys  often  go  away  the 
farthest  into  foreign  countries.  Moreover  the  primary  school 
only  makes  its  influence  felt  economically  in  the  third  or 
fourth  generation,  because  without  home  education  from 
the  earliest  years  onwards  too  much  ground  is  lost  again 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE    129 

after  leaving  school.  The  great  importance  of  the  agricul- 
tural and  technical  schools  has  already  been  noticed,  but  in 
order  that  they  should  prosper  they  presuppose  undertakings 
arranged  on  progressive  Unes,  which  everywhere  demand 
trained  ability.  Hence  the  fact  that  Austria  and  Hungary 
have  done  much  for  their  school  system  during  the  last  decade 
is  in  accordance  with  their  position  and  task  in  Mid-Europe 
and  wiU  certainly  have  excellent  results  in  the  course  of  time, 
but  the  education  question  must  not  be  regarded  as  the  only 
decisive  factor.  The  first  and  most  pressing  economic  prob- 
lem relates  to  the  productiveness  of  labour. 

Suppose  a  hundred  men  complete  a  piece  of  work  which 
could  have  been  done  by  sixty,  it  is  evident  at  once  that 
the  hundred  must  be  worse  clothed  and  nourished  than  the 
sixty.  In  a  natural  economic  condition  of  hfe  this  follows 
directly  of  itself.  Each  of  the  latter  workmen  gets  more 
com,  flax,  wine  or  salt.  And  with  a  system  of  money  wages 
and  money  values  the  same  simple  law  holds  good.  All 
can  have  more  to  consume  if  all  produce  more.  The  main 
difference  then  between  the  economic  system  of  the  German 
Empire  and  that  of  Austria-Hungary — to  which  however  a 
hundred  exceptions  may  be  granted  from  the  outset — seems 
to  be  that  with  us,  by  reason  of  that  economic  character 
described  above,  the  same  work  is  on  the  average  done  by 
fewer  persons.  The  North  and  South  Germans  have  them- 
selves learnt  this  lesson  but  slowly,  for  by  nature  we  all, 
without  exception,  are  slow  and  take  our  time.  Nor  is  it 
desirable  that  the  efficiency  of  labour  should  be  increased 
so  artificially  and  excessively  as  is  demanded  by  Taylor's 
American  system,  because  this  is  too  harmful  to  the  workers 
themselves  ;  but  however  simple  the  matter  appears  it  yet 
constitutes  the  primary  economic  anxiety  for  Mid-Europe  : 
we  must  speed  up  those  who  are  lingering  in  the  old  habits 
of  work,  so  that  they  approximate  to  the  labour  rhythm  of 
the  progressive. 

Moreover,  the  Government  must  lead  the  way  by  setting 
a  good  example,  and  must  overhaul  its  ofi&cial  machinery  so 
that  fewer  but  better  paid  officials  may  do  the  same  services 


130  CENTRAL  EUROPE 

as  are  now  carried  out  by  too  many  poorly  paid  ones.  This 
reform  in  the  public  services  will  not  be  a  saving  of  money 
but  of  wasted  hours  of  work.  In  this  respect  there  is  much 
to  tighten  up  even  on  the  north  of  the  Erzgebirge,  but  still 
more  on  the  south.  Professor  v.  PhiUppovich  has  more 
than  once  called  attention  to  this  important  matter.  Owing 
to  the  impressive  example  which  the  officials  in  town  and 
country  offer  to  the  rest  of  the  inhabitants,  they  are  the 
primary  agents  in  setting  the  rhythm.  From  above  down- 
wards there  must  be  some  degree  of  speeding  up  amongst 
them  from  year  to  year.  Perhaps  this  will  not  in  the  first 
instance  make  the  officials  more  amicable,  but  it  will  raise 
them  as  men,  as  a  class,  and  as  models  for  the  crowd.  Later 
on  the  pleasant  manner  of  Ufe  may  reappear,  if  indeed  it 
exists  independently  in  the  race.  Economically  that  State 
is  the  best  which  carries  out  the  most  public  work  with  the 
fewest  employees. 

Reforms  to  increase  production  are  often  indeed  attempted 
in  a  mistaken  way,  when,  the  pay  remaining  the  same,  a 
higher  production  is  enforced  by  supervision  and  threats. 
The  attempt  is  expUcable  but  can  only  afford  a  quite  transi- 
tory success,  as  any  horse-owner  can  tell  you  from  his  own 
experience.  And  this  course  is  wrong  too  for  economic 
reasons,  for  a  decrease  in  the  number  of  employee  acts  as 
a  decHne  in  the  general  purchasing  power,  if  the  individuals 
do  not  at  the  same  time  increase  their  consumption. 
That  portion  of  the  population  which  is  no  longer  to  sit  in 
the  office  needs  to  find  in  the  increased  demands  of  those 
more  fully  employed  the  starting-point  of  an  opportunity 
to  earn. 

And  here  we  touch  upon  the  popular  counter-argument 
against  the  systematisation  of  work  in  all  departments.  It 
is  said  that  in  this  case  there  wiU  be  still  more  of  the  unem- 
ployed, the  unoccupied  and  the  emigrants.  But  each 
country  where  work  is  more  strictly  disciplined  offers  an 
obvious  proof  that  exactly  the  contrary  is  true.  Wherever 
work  is  quick  there  consumption  is  abundant,  and  there 
wages  and  salaries  rise,  even  if  attempts  are  made  to  keep 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE    131 

them  down,  and  the  home  market  extends  daily.  Where 
much  is  earned  and  consumed  there  is  abundant  opportunity 
for  work. 

When,  fifty  years  ago,  Lassalle  began  his  brilliant  social 
democratic  agitation  among  the  German  workpeople,  he 
used  the  much  disliked  and  much  misunderstood  phrase, 
"  cursed  modesty."  Fundamentally  however  he  was  right. 
I  grew  up  in  the  very  neighbourhood  in  which  he  first 
spoke  to  poor  home-workers.  There  I  found  that  very 
state  of  things  from  which  to-day  a  few  districts  of  Germany 
and  many  districts  in  Austria-Hungary  are  suffering  :  badly 
organised  work,  old,  rattUng  looms,  long  hours,  low  rate  of 
production  per  hour,  miserable  wages,  exhaustion  and  under- 
feeding. This  deserved  condemnation  as  "  unworthy  of 
humanity "  in  order  that  the  working  abihty  might  be 
raised  out  of  that  worthlessness  which  was  borne  only  too 
submissively,  and  also  in  order  that  German  industry,  at 
that  time  hard  pressed,  might  be  able  to  compete  everywhere 
in  the  world's  markets.  The  will  to  rise  must  be  awakened, 
the  call  to  a  fresh  creed  of  work  must  be  sounded.  Some 
workers  may  at  first  understand  this  as  meaning  for  them 
that  they  can  earn  more  wages  and  increase  their  consump- 
tion without  increased  production.  But  this,  which  is  a 
vain  attempt  in  the  long  nm,  is  as  natural  from  their  point 
of  view  as  that  converse  attempt  on  the  part  of  the  employers 
to  pay  less  for  better  work,  to  which  we  referred  above. 

I  am  almost  afraid  to  dwell  in  such  detail  upon  these 
simple  matters,  but  since  in  what  follows  much  must  be 
said  of  the  intensity  of  the  Mid-European  economic  system, 
it  appeared  doubly  necessary  not  to  hurry  over  these 
essential  preHminary  principles. 


What  might  not  the  Hungarians  do  with  their  land  !  I 
see  Hungary  in  mental  picture  before  me :  woods  on  the 
mountains  and  on  the  edges  of  the  plains,  and  in  addition 
pastures  and  meadows.  Both  together  occupy  roughly  half 
the  land.     But  then  comes  the  wheat  district,  the  centre 


132  CENTRAL  EUROPE 

point  of  all  Hungarian  life.  According  to  the  year  from 
35,000  to  39,000  qkm.  are  cultivated  as  wheat-fields.  How 
much  might  be  grown  there !  What  a  splendid  golden 
harvest  of  twice  the  thickness  ! 

Of  course  men  must  not  be  blamed  for  the  effects  of  the 
climate,  but  allowing  for  this  we  have  to  deplore  a  production 
acknowledged  on  all  sides  to  be  painfully  small.  Hungary 
with  its  excellent  soil  produces  about  half  as  much  per 
acre  as  does  Germany.  In  other  words  :  Germany  in  many 
years  produces  on  half  the  wheat  land  the  same  quantity 
of  wheat  as  in  Hungary  is  grown  on  double  the  area.  Oiu- 
statistical  section  gives  more  exact  figures. 

But  besides  this  a  hectare  in  Germany  although  it  produces 
double  is  cultivated  with  less  labour  than  in  Hungary.  This 
is  shown  if  we  compare  the  number  of  the  agricultural 
population  with  the  total  acreage  of  arable  land. 

How  it  comes  about  that  there  is  so  much  less  agricultural 
energy  available  in  agrarian  Hungary  than  in  industrial 
Germany  is  a  problem  frequently  discussed  but  by  no  means 
simple.  On  the  one  hand  it  involves  quite  general  socio- 
logical experiences  and  on  the  other  adjustments  special  to 
Hungary.  Agricultural  machinery  of  all  kinds  results  in  a 
turning  back  of  labourers  out  of  the  bam  and  field  into  the 
workshop.  The  more  agriculture  is  done  by  machinery  the 
more  labourers  drawn  from  the  farms  are  found  in  industry. 
This  has  happened  to  a  great  extent  in  the  German  Empire 
and  also  in  Bohemia.  At  the  same  time  the  more  agri- 
cultural machinery  is  used  the  more  the  number  of  labourers 
who  are  permanent  through  the  winter  decreases,  and  thus 
the  resident  agricultural  population  in  general  diminishes. 
The  effect  is  reciprocal.  The  machine  drives  out  the 
labourer  and  the  want  of  labour  cries  out  for  more  machines. 
Not  that  the  Hungarian  large  estates  have  no  machines ! 
I  visited  the  fine  agricultural  museum  in  Budapest  and 
congratulated  on  this  occasion  all  those  who  interested 
themselves  in  Hungarian  farming.  There  are  working 
models  there  of  all  the  most  modem  contrivances,  and  the 
general  trend  of  mind  will  be  found  fully  to  accord  with 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE   133 

our  own.  Yet,  all  the  same,  many  of  the  big  estates  and 
most  of  the  peasant  holdings  are  notoriously  in  the  old 
pre-industrial  stage.  A  factor  which  almost  equals  in 
importance  the  introduction  of  machinery  is  the  use  of 
artificial  manures  according  to  the  quaUty  of  the  soil  and 
its  requirements.  Machines  and  manure  presuppose  men 
who  know  how  to  use  them,  and  whose  self-interest  is 
adequately  aroused.  This  means  for  the  smaU  farmer  a 
sale  from  which  he  himself  gets  the  advantage  of  his  work. 
Here,  from  what  I  can  learn,  special  Hungarian  conditions 
begin  to  have  their  effect.  Of  these  I  cannot  speak  since 
I  have  no  personal  knowledge  of  the  matter :  viz.  the 
organisation  of  the  Hungarian  corn  trade. 

If  Hungary  could  so  increase  its  agricultural  output  as 
to  produce  a  third  more,  Mid-Europe  would  be  thereby 
assured  of  an  independent  food-supply.  The  existing  small 
production  is  thus  a  potential  asset  for  the  future. 
German  and  Hungarian  interests  are  here  in  the  closest 
agreement.  I  picture  to  myself  the  future  Austrian  and 
German  Imperial  corn-store  as  being  in  Budapest. 


Influenced  by  such  thoughts  as  these  I  have  attempted, 
in  regard  to  various  industries,  to  determine  by  means  of 
the  pubMshed  evidence  the  difference  in  the  productivity  of 
the  labour  employed  in  Austria  and  in  Germany  respectively. 
But  my  results  are  not  free  from  objection  because  the 
methods  of  pajmient  employed  in  the  two  cases  only 
partially  correspond.  In  coal-mining,  so  far  as  I  was  able 
to  calculate,  I  consider  the  difference  to  be  not  very  great ; 
in  hgnite-mining  it  appears  extraordinary  ;  in  the  production 
of  pig-iron  I  obtained  no  clear  results  because  here  the 
supply  of  machinery  is  of  primary  importance.  The  nearer 
to  the  northern  frontier  of  Austria  these  occupations  are 
carried  on  the  more  they  approximate  to  the  Saxon  and 
Silesian  enterprises.  But  the  actual  fact  that  the  workman 
in  Austria-Hungary  does  not  quite  attain  to  the  average 
economic  efficiency  of  the  German  may  be  taken  as  admitted. 


134  CENTRAL  EUROPE 

Amongst  other  troubles  connected  with  Austrian  company 
legislation,  taxation  and  the  freightage  conditions,  the 
Austrian  employers  usually  put  forward  this  difference  in  the 
comparative  value  of  the  workers  as  one  important  reason 
why  they  cannot  enter  upon  a  joint  economic  life  with  the 
industries  of  the  German  Empire  without  special  guarantees. 
Of  course  it  must  not  be  left  out  of  account  in  this  connection 
that  the  Austrian  workman  gets  on  the  average  lower  wages. 
Here  too  strictly  accurate  comparisons  are  hardly  possible 
since  each  district  in  either  State  has  its  own  wage  fluctua- 
tions. But  miners'  wages  in  Germany,  for  example,  are  in 
general  higher  in  marks  than  they  are  in  Austria  in  kronen. 
The  prevaiUng  wage  for  unskilled  work  is  decidedly  lower  in 
Austria  than  in  Germany. 

Whether  or  no  economic  statistics,  either  now  or  in  the 
future,  might  supply  better  material  with  regard  to  all  these 
very  important  distinctions,  for  our  purpose  here  we  are 
only  concerned  to  get  a  general  grasp  of  the  state  of  affairs. 
We  attempt  to  picture  the  economic  life  of  '  Central 
Europe  as  a  whole,  and  then  find  that  it  does  not  exist  as 
complete  in  itself  or  comparable.  But  this  awakens  appre- 
hensions on  both  sides  at  the  thought  of  combination.  The 
stronger  section  fears  the  competition  of  poorer  and  cheaper 
labour,  the  weaker  section  fears  the  more  estabHshed  power. 
These  hesitations  present  a  slightly  different  appearance  in 
each  department  but  they  are  nowhere  entirely  absent. 

We  frankly  admit  that  these  apprehensions  will  prove  a 
hindrance  to  all  negotiations  concerning  tariffs  and  sjmdi- 
cates.  At  the  same  time  their  importance  need  not  be 
exaggerated,  because  we  have  already  endured  unharmed 
very  noticeable  differences  of  this  kind  in  each  of  our 
separate  States  and  in  all  the  provinces.  Within  the 
German  Empire  possibilities  of  profit  and  production  are 
quite  different.  The  value  of  labour  is  very  various  in  town 
and  country  and  in  east  and  west.  Wages  in  Upper  Silesia 
are  quite  different  from  those  in  the  industrial  district  of 
l^enish-Westphaha,  and  the  conditions  of  employment  for 
private  employees  and  for  communal  officials  vary  also. 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE  135 

The  same  thing  applies  to  Bohemia  as  compared  with  the 
Steiermark,  to  Budapest  as  compared  with  Siebenbiirgen. 
Thus  a  Central  European  economic  union  would  not  result 
in  something  fundamentally  new,  but  only  in  a  repetition 
of  a  sufficiently  well-known  condition  or  occurrence  over  a 
wider  area. 

Moreover,  in  this  connection  everything  is  continually 
changing.  What  seems  to  us  to-day  a  low  rate  of  produc- 
tion was  not  long  ago  a  high  rate.  It  is  most  interesting  to 
turn  over  the  older  tables  on  this  subject.  That  stage  of 
development  which  appears  backward  to  the  present-day 
observer  from  the  German  Empire  was  once  our  own 
condition,  and  that  too  in  not  such  a  very  far  distant  past. 
And  of  course  occasional  alterations  in  the  methods  of 
collecting  the  pubhshed  data  are  disturbing.  If  we  neglect 
them  for  the  moment  it  may  perhaps  be  said  that  agricul- 
turally Germany  twenty  years  ago  was  where  Austria  now 
is,  and  forty  years  ago  was  where  Hungary  now  is.  But 
what  are  twenty  years  for  such  an  extensive  development  ? 
The  same  thing  may  be  noticed  in  the  case  of  industry.  It 
is  a  strong  argument  against  any  pride  on  the  part  of  the 
progressive  or  any  despondency  on  the  part  of  districts  and 
branches  of  work  that  have  gone  forward  more  slowly.  If 
once  these  things  are  looked  at  from  a  certain  distance,  the 
contrasts  grow  smaller.  Central  European  working  folk 
represent  old  and  new  periods  in  a  variously  coloured  inter- 
mixture, but  nevertheless  essentially  they  are  even  now  on 
the  point  of  becoming  a  united  people. 


But  of  course  it  must  not  be  thought  that  there  is  every- 
where present  in  the  Danubian  Monarchy  a  desire  to  adopt 
the  new  German  economic  spirit  with  its  strained  energy  of 
work  and  its  strong  organisation  !  With  us  too  this  spirit 
grew  up  but  slowly  and  under  much  protest  and  opposition, 
and  there  are  no  small  number  of  people  in  the  German 
Empire,  in  agriculture,  industry  and  small  trades  who  even 
to-day  regret  the  "  good  old  times,"  and  blame  capitedism 


136  CENTRAL  EUROPE 

for  having  destroyed  the  security  of  their  business  ;  believers 
in  the  older  economic  creed,  and  its  more  comfortable  rate 
of  living  !  Often,  indeed,  it  is  only  the  old  who  talk  in  this 
way,  while  their  sons  are  resolute  children  of  the  present, 
and  as  such  belong  to  or  incline  to  the  farmers'  union  or 
the  retailers'  association  or  the  handworkers'  guild.  All 
these  economic  unions  with  their  banks,  their  adjustment  of 
relations  and  obUgations  could  not  indeed  do  otherwise  than 
demand  from  their  members  a  sure  turnover,  increased 
soHdity,  efforts  towards  increased  production,  adaptabihty 
and  work  on  a  cash  basis.  In  this  sense  they  are  at  bottom 
capitaHst  structures  in  spite  of  their  partially  anti-capitaUst 
speeches.  All  the  unions  for  fixing  rates  of  wages  too,  and 
the  other  societies  for  workers  and  employees  have  a  Uke 
intrinsic  tendency,  and  are  generally  very  well  aware  of  this 
themselves.  Each  trade  unionist  when  he  joins,  bids  fare- 
well to  the  old  Hfe  of  unregulated  work  done  as  it  happened 
to  suit.  Hence  if  we  want  to  find  the  really  old  people  we 
do  not  find  them  in  the  economic  unions,  they  are  the 
separate  individuals  :  the  normal  men,  now  growing  infirm, 
of  an  earher  vanished  economic  period ;  the  numerous 
small  millers,  jobbing  butchers,  ropemakers,  tanners,  tailors 
or  shoemakers,  with  whom  things  often  go  very  badly,  or 
the  isolated  small  farmer,  without  instruction,  discipline  and 
assistance,  or  those  wandering  or  resident  traders  who  did 
not  learn  arithmetic  and  understand  nothing  of  their  own 
goods.  Such  honest  but  unhelpable  individuals,  who  to-day, 
as  sixty  years  ago,  have  learnt  neither  technique  nor  com- 
bination, Uve  with  the  feeling  that  they  are  terribly  ill- 
treated  by  their  contemporaries,  grown  covetous  and  orga- 
nised ;  they  do  not  understand  that  the  average  demands 
on  working  men  and  on  trade  production  must  increase. 
People  of  this  kind,  however,  appear  afresh  with  each 
intermittent  advance  in  management,  and  consequently 
will  be  met  with  everywhere  to  some  extent;  even  in  the 
most  advanced  industries  of  all.  They  have  been  incorrectly 
termed  the  decaying  middle  class.  The  term  is  incorrect 
because  out  of  that  same  old  middle  class  too  all  the  most 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE   137 

vigorous  employers  have  raised  themselves  and  are  daily 
ascending.  Whence  otherwise  could  they  come  ?  To  speak, 
for  instance,  of  the  joiners  ;  they,  on  the  whole,  make 
marked  progress,  receiving  numbers  of  orders  owing  to  the 
increased  incomes  of  the  population.  But  some  of  them 
cannot  rise  with  the  rest  because  they  lack  means  or  quality. 
These  ally  themselves  to  the  complainers  everywhere,  and 
thus  increase  a  social-poUtical  group  which  accomplishes 
hardly  anything  positive,  because,  or  as  long  as,  it  has  no 
ideals  of  education  or  organisation,  but  which  may  prove  a 
serious  obstacle  to  general  progress.  In  the  German  Empire 
this  stream  of  protest  against  the  new  economic  creed  has 
for  the  most  part  died  out,  and  has  largely  been  absorbed 
into  forms  of  association  that  are  efficient  for  work.  If  I 
am  not  greatly  mistaken,  however,  opposing  humours  of  the 
kind  may  be  expected  in  a  greater  degree  in  Austria  and 
perhaps  too  in  Hungary,  so  soon  as  the  idea  of  an  economic 
Mid-Europe  is  taken  in  earnest,  for  here  in  the  Dual  Monarchy 
the  olden  time  is  stiU  very  powerful  in  men's  minds.  A 
Central  European  combination,  however  prudently  and 
moderately  carried  out,  must  inevitably  be  foUowed  by  a 
period  of  economic  protesters  and  romanticists  who  wish  to 
hear  and  see  nothing  of  all  this  rubbish  of  organised  capi- 
taUsm.  About  this  we  may  be  certain  from  the  outset,  and 
need  not  lose  our  heads  when  it  happens.  It  wiU  last 
perhaps  half  a  generation  in  its  passionate  form  and  will 
decKne  in  proportion  as  the  success  of  the  stricter,  newer 
system  becomes  evident. 

But  as  has  already  appeared  in  social  evolution  up  to  the 
present,  these  unimportant  individuals  who  are  passed  over 
in  the  process  of  development  are  joined  by  a  certain  section 
of  the  nobiUty  and  clergy,  from  no  personal  necessity,  but 
because  these  latter  are  patriarchal  romanticists.  To  them 
the  progress  of  democracy  which  is  involved  in  all  intensifica- 
tion of  work  is  unpleasant.  For  in  fact  a  man's  average 
production  cannot  be  increased  without  raising  him  as  a 
person.  The  man  who  can  tend  a  machine  is  to  the  ordinary 
man  with  a  shovel  as  a  rider  is  to  a  foot-passenger.     He 


138  CENTRAL  EUROPE 

feels  himself  worth  two.  People  must  regard  him  in  quite 
a  different  way  because  he  can  make  or  spoil  more.  This 
applies  just  as  much  in  the  villages  as  in  the  town  and 
makes  itself  apparent  without  agitation.  If  there  is  agita- 
tion in  addition  it  aggravates  the  transition,  and  the 
patriarchal  directors  of  the  older  processes  of  work  and  of 
the  religious  life  naturally  in  the  first  instance  regard 
the  whole  modern  technique  as  ruin.  There  need,  however, 
be  no  lasting  opposition  here,  for  the  aristocrats  learn 
quickly  to  obtain  higher  profits  through  better  workmen 
whereby  both  sides  gain,  and  the  clergy  make  the  unex- 
pected discovery  that  they  can  well  hold  their  own  even 
in  the  new  economic  church.  Let  inquiries  be  made  in 
Rhenish- Westphalia  and  Upper  Silesia  !  Hence  the  opposi- 
tion of  the  patriarchal  upper  class  is  neither  absolute  nor 
permanent.  But  it  may  be  anticipated  in  every  case 
of  improvement  in  average  technique  and  activity.  And 
all  sorts  of  good  and  justifiable  feehngs  come  into  play 
here.  The  old  economic  world  with  its  comfort  and 
despotism,  in  which  however,  as  Professor  Max  Weber 
says,  "  the  familiar  '  thou  '  can  only  be  employed  from 
one  side,"  has  its  own  attraction,  more  indeed  for  those 
above  than  for  those  below,  but  still  it  has  attraction.  The 
old  castle  with  no  factory  chimney  in  its  neighbourhood, 
the  fallow  land  on  which  Nature  is  trying  to  set  herself  to 
rights  again,  the  neglected  swamp  with  all  its  teeming 
animal  Ufe,  the  Uttle  town  with  its  clumsiness  and  creduUty, 
all  this  and  much  else  besides  is  like  a  mediaeval  fairy  tale 
which  one  does  not  like  to  spoil.  This  fairy-tale  spirit  is 
much  more  frequent  in  Austria-Hungary  than  in  the  German 
Empire.  Go  into  the  woods  for  instance !  Watch  the 
country  people  on  Sunday  outside  the  church  !  Must  all 
this  indeed  be  disciplined  into  the  normal,  and  estimated 
according  to  its  utilitarian  value  ?  The  Danube  people 
think  it  so  dull  on  the  Elbe,  because  the  latter  has  become 
such  a  much  more  reasonable  river.  These  romantic 
temperaments  are  opposed  to  the  modernisation  of  the 
economic  system      They  do   not  want  to  have   their  old 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE    139 

spirit  artificially  cleaned  and  repaired,  for — "What  does  it 
profit  a  man  if  he  gain  the  whole  world  and  lose  his  own 
soul  ?  " 

Come  hither,  dear  romanticists,  we  want  to  talk  together 
as  friends  !  I  will  not  tell  you  that  people  can  increase 
their  production  by  technique  and  organisation  without 
altering  themselves.  That  won't  do.  To  enter  the  economic 
system  of  Mid-Europe  is  a  soul-transforming  decision.  That 
the  unavoidable  transformation  accompan5dng  the  entrance 
into  modernity  will  give  more  to' the  soul  of  the  man  affected 
than  it  takes  from  it,  you  may  perhaps  wish  to  deny,  but 
on  this  point  I  venture  really  to  speak  from  experience  and 
observation.  The  old  race  of  pre-capitaUst  wage-earners, 
smaU  townsfolk,  handworkers  and  miners  are  generally 
imagined  by  your  aesthetic  people  as  very  different  and 
much  more  picturesque  than  the  reaUty.  The  reality  is 
harsh  and  monotonous  and  poor,  both  inwardly  and  out- 
wardly, in  the  good  things  of  Ufe  !  These  old  lower  orders 
gain  spiritually  ever5rwhere  by  the  introduction  of  the  new 
method  of  work,  even  if  they  struggle  against  the  new  epoch 
owing  to  ignorance  and  to  the  danger,  referred  to  above, 
of  an  economic  decUne.  The  beautiful  old  culture  hardly 
belonged  to  you  at  all.  In  the  churches  alone,  and,  be  it 
admitted,  even  in  the  churches  of  the  villages  and  small 
towns,  had  the  resident  people  of  the  old  style  any  share  in 
the  beautiful  art  of  their  age.  The  good  done  by  the  church 
in  this  respect  should  not  be  forgotten.  But  does  this 
constitute  the  whole  of  what  is  attainable  by  the  poor  man 
and  his  family  ?  No,  it  is  certainly  not  he  who  loses  by 
the  change  into  modernity.  For  a  time  all  his  existing 
ideas  totter  with  his  growing  independence,  but  that  is  a 
state  of  transition.  Whatever  is  good  in  what  he  retains 
of  his  past  soon  shows  itself  again.  But  of  course  there  is 
a  certain  section  which  was  on  the  upper  side,  and,  on  the 
basis  of  this  needy  underworld,  fostered  a  pleasant  culture 
with  skill  in  fine  handicrafts  and  the  laying  out  of  parks. 
This  section  has  learnt  to  demand  more  in  the  meanwhile 
and  uses  motor-cars,  lends  its  money  advantageously  to  the 


140  CENTRAL  EUROPE 

bank,  dresses  in  good  machine-made  cloth,  reads  daily  a 
newspaper  printed  by  night  workmen  with  a  rotary  printing 
press,  whilst  it  wishes  in  addition  to  aU  this  to  keep  up  the 
dehghtful  appearance  of  comfortable  grandfatherly  days 
and  to  mingle  the  magic  of  the  patriarchal  past  with  the 
utility  of  the  technical  present,  in  a  confused  but  pleasantly 
flavoured  drink.  If  you  romanticists  really  wanted  to 
preserve  the  good  old  time,  with  all  its  attendant  features, 
thatched  roofs,  loss  of  time  and  smells,  then,  though  I 
should  not  join  you,  I  should  respect  you  as  privileged  and 
interesting  eccentrics.  But  you  don't  want  this  at  all ! 
And  indeed  you  could  not !  You  could  not  because  you 
yourselves  would  be  much  too  poor  for  this  new  pretentious 
present.  Therein  lies  coercion  for  you  too,  and  the  more  so 
since  after  the  war  there  will  be  much  to  pay.  With  rising 
prices  it  is  impossible  to  be  an  economic  romanticist  without 
sinking  in  the  social  scale. 


Nevertheless  there  is  an  element  of  justice  in  this  anxiety 
in  face  of  the  supremacy  of  the  organising  business  intel- 
lect. And  it  is  in  this  very  matter  that  Austria,  and 
especially  Vienna,  can  supplement  Berlin  and  the  North  in 
a  salutary  and  excellent  manner.  The  North  has  created 
the  type  of  successful,  disciplined  man.  In  this  way  a  good 
general  efhciency  has  been  attained  which  can  be  applied  in 
the  most  varied  departments  of  work.  Industrial  militarism 
can  be  set  up  as  well  in  forestry  as  in  sugar  production  or 
the  manufacture  of  shoes.  But  this  general  capability  is 
not  in  itself  sufficient  to  secure  markets  if  taste  and  form 
are  not  added.  For  railway  lines  and  kitchen  pots  indeed 
utility  is  almost  everything  and  form  almost  nothing,  but 
there  are  a  hundred  objects  which  are  not  quite  complete 
unless  the  progressive  methods  of  work  are  combined  with 
a  well-devised  form  and  colour.  Every  one  knows  what 
efforts  we  have  made  in  this  respect  under  the  guidance  of 
the  "  German  Work  Union."  But  when  in  the  last  months 
before  the  war  the  Union  held  its  fine  exhibition  at  Cologne- 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE  141 

on-Rhine,  the  "  Austrian  House  "  excelled  all  the  others. 
How  quiet  the  pompous  members  suddenly  became  in 
there,  members  who  might  easily  have  thought  other- 
wise that  they  could  do  everything  perfectly  !  That  was 
a  lasting,  unforgettable  success.  If  such  splendid  abiUty 
is  omitted  from  Mid-Europe,  then  it  will  lack  something 
invaluable  and  rich  in  future  possibilities. 

Thus  we  reject  all  conceptions  of  the  common  economic 
life  as  a  one-sided  extension  of  our  North  German  agricul- 
tural and  industrial  methods  up  to  the  lower  Danube, 
instead  of  a  simultaneous  interchange  from  South  to  North. 
Not  control,  but  intermixture.  We  have  more  horse-power, 
and  you  more  music.  We  think  more  in  terms  of  quantity, 
the  best  of  you  think  rather  in  terms  of  quaUty.  If  we  can 
unite  our  respective  abihties,  then  and  for  the  first  time  the 
hcird  North  German  civihsation  will  secure  by  your  assistance 
that  touch  of  charm  which  will  make  it  tolerable  to  the 
outside  world. 

As  we  have  said  before,  Paris  has  long  possessed  a  magic 
attraction  for  us  Germans  of  the  Empire  in  North  and 
South,  And  fresh  threads  wiU  timidly  begin  to  spin  them- 
selves again  after  the  war,  for  the  home  of  so  much  deUcacy 
and  competence  does  not  lose  its  power  through  mihtary 
events  of  however  serious  a  kind.  But  even  so,  something 
has  been  broken.  Here  Vienna  ought  to  seize  its  opportunity. 
The  whole  of  Germany  is  now  more  open  to  the  Viennese 
crafts  than  ever  before.  The  Viennese  might  make  an 
artistic  conquest  extending  to  Hamburg  and  Danzig.  There 
are  numerous  finishing  trades  in  which  the  Austrians  will 
produce  quite  original  goods  if  they  can  only  get  a  firm 
start  in  respect  to  technique  and  capital.  This  is  evident 
enough  already  in  the  glass  trade,  in  pottery,  in  paper 
manufacture,  in  hats,  veils,  chairs  and  many  other  things. 
Where  inteUigence  prevails  it  wiU  not  be  injured  by 
machinery,  but  will  only  remain  terrified  in  the  comer  so 
long  as  the  machines  are  not  helpful.  And  the  world  wants 
sldlfully  made  things.  We  want  to  join  together  to  supply 
the  rest  of  the  world,  through  the  ports  of  Hamburg  and 


142  CENTRAL  EUROPE 

Trieste,  with  all  the  beautiful  things  they  need  for  their  house- 
holds. 

a|c  ^  4c  *  «  a): 

We  have  so  far  said  Uttle  in  this  section  of  the  Southern 
Germans  of  the  Empire.  This  omission  had  a  definite 
purpose,  for  it  is  only  now  after  the  problem  of  establishing 
a  common  economic  spirit  has  been  worked  out  that  we 
wish  to  bring  forward  our  Southern  Germans  as  an  example 
and  model  of  success.  Almost  the  same  anxieties  and 
scruples  about  a  closer  union  with  North  Germany  existed 
before  1870  in  Bavaria,  Wiirttemberg,  Baden,  Hesse  and 
Frankfurt-on-Main.  These  countries  were  members,  it  is 
true,  of  the  Customs  Union,  but  in  other  respects  they  main- 
tained a  strong  and  suspicious  particularism  towards  each 
other  and  very  much  more  towards  Prussia.  In  culture  and 
economic  Hfe  they  wished  to  stay  as  they  were.  In  Bavaria 
especially  the  new  Empire  was  greeted  in  no  very  friendly 
way  as,  in  the  upper  Bavarian  phrase,  an  Empire  of  barracks 
and  Jews.  The  BerUner  was  for  long  an  aHen,  and  is  stiU 
so  in  parts  even  to-day.  Nevertheless  the  unification  was 
consummated.  To-day  the  majority  of  South  German 
farmers  belong  to  the  farmers'  union,  and  the  South 
German  employers  belong,  according  to  the  nature  of  their 
business  and  their  further  incHnations,  either  to  the  central 
industrial  association  or  to  the  German  industrial  union. 
The  merchants  belong  to  the  German  commercial  congress, 
the  towns  to  the  town  congress,  the  workpeople  to  the 
Social  Democrats,  the  Christian  or  the  Hirsch-Duncker 
unions,  the  employees  to  the  union  of  persons  with  fixed 
salaries  or  to  one  of  the  two  associations  of  technical  workers, 
and  so  on.  There  is  no  separate  South  German  working 
population,  advancing  along  a  path  of  its  own,  no  special 
unions  for  South  Germans,  no  division  at  the  Main  for 
co-operative  stores  or  economic  cartels,  the  whole  now  lives 
with  a  common  breath.  People  are  stiU  conscious  that  there 
were  differences,  but  they  are  no  longer  disturbing.  And 
with  all  this  the  Southerners  have  certainly  suffered  no 
economic  loss.     What  industries  are  flourishing  in  Niirem- 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE  143 

berg,  Munich,  Augsburg,  on  the  Neckar  from  Reuthngen 
through  Stuttgart  to  Heilbronn,  on  the  Rhine  from  Mann- 
heim and  Ludwigshafen  to  Offenbach  and  Mainz  !  The 
South  German  peasant  farmer  has  made  marked  progress. 
His  profits  are  rising  and  the  number  of  his  Uve  stock  is 
increasing.  No  one  wants  to  put  an  end  to  the  joint  develop- 
ment, no  one.  There  are,  however,  people  enough  who  would 
prefer  to  drop  what  still  remains  of  separate  railway 
authority,  water  authority,  postage  stamps  and  such  Hke. 
The  Southern  German  does,  however,  wish  and  intend  to 
maintain  after  his  own  manner  his  strong  political  and  social 
liberahsm  ;  and  this  indeed  he  wants  to  introduce  into 
Prussia.  Since  1870  he  has  had  a  noticeable  influence  in 
forming  the  German  national  character,  and  is  very  far 
from  regarding  himself  as  a  mere  appendage.  Catholics 
and  Protestants,  Bavarians  and  Alemani  declare  this 
unanimously.  All  the  earlier  humours  of  the  Confedera- 
tion of  the  Rhine  are  washed  away  as  though  they  had 
never  existed.  People  quarrel,  as  is  the  custom  of  mankind, 
over  a  hundred  things,  but  certainly  not  over  that  inclu- 
sion in  the  German  economic  system  which  is  henceforth 
indispensable. 

This  example  is  instructive  for  Mid-Europe.  We  admit 
at  once  that  the  task  now  is  greater  and  more  difficult  than 
then,  because  we  have  to  combine  nations  speaking  different 
languages  and  with  wider  economic  differences.  But  then 
has  not  every  one  in  the  interval  gained  a  wider  under- 
standing of  the  need  for  more  extensive  alliances  ?  Half  a 
century  of  railway  communication  and  international  com- 
merce has  educated  us  all.  But  perhaps  it  is  the  especial 
task  of  the  South  Germans  to  be  available  as  intermediaries 
when  the  time  comes  for  the  various  associations  of  trade  and 
industry  to  seek  out  and  discover  one  another  across  the 
German- Austrian-Hungarian  frontiers. 

*♦♦»♦♦ 

To  unite  Central  Europe  by  mere  political  measures  so 
long  as  the  economic  groups  themselves  do  not  call  for  unity 
will  certainly  be  a  futile  beginning.     Incipient   evidence 


144  CENTRAL  EUROPE 

of  such  a  call  is  already  present,  but  for  the  most  part 
only  in  the  German-speaking  districts.  Points  of  contact  in 
congresses  exist  in  scientific,  technical,  agricultural  and 
industrial  circles.  One  quite  old  union  is  that  in  the 
bookselling  trade.  Amongst  poUtical  parties  the  Social 
Democrats  have  fostered  unity  the  most,  and  to  some 
extent  also  the  Anti-Semites  and  the  Pan-Germans.  In  this 
connection,  so  far  as  I  know,  the  German-Austrians  are 
more  dihgent  visitors  of  German  institutions  than  vice  versa. 
There  is  a  German-Austrian-Hungarian  economic  union,  a 
Central  European  economic  association  and  other  similar 
societies.  These  kinds  of  reunions  must  on  principle  be 
increased  and  systematised,  and  out  of  voluntary  congresses 
permanent  associations  must  be  formed  for  common  enter- 
prises. 

Any  one  who  studies  the  preHminary  history  of  the  founda- 
tion of  the  German  Empire  will  come  across  records  of 
numerous  assembUes  and  festivals,  at  which  toasts  were 
drunk,  songs  were  sung  and  speeches  made.  Individually 
they  may  be  of  doubtful  value,  but  regarded  as  a  whole 
they  served  as  practice  for  the  joint  pohtical  hfe,  they  were 
the  "  walking  out  "  together  before  the  betrothal.  This 
obviously  happens  infinitely  more  easily  with  people  speaking 
the  same  language  than  with  those  of  ahen  tongues.  But 
since  in  Austria  and  Hungary  most  of  the  leading  men  of 
all  professions  and  occupations  are  proficient  in  German, 
language  is  no  absolute  hindrance  if  only  goodwill  is 
present.  This  will  be  so  much  the  more  the  case  with 
professional  meetings  if  practical  and  material  advantages 
are  pursued  and  obtained. 

From  henceforth  the  attention  of  the  directors  of  pro- 
fessional and  other  unions  ought  to  be  turned  much  more 
than  before  towards  joint  conferences.  The  aim  is  as 
follows  :  a  Mid-European  trade  union,  handworkers'  union, 
technical  experts'  union  and  so  on.  These  unions  will,  Uke 
all  new  unions,  seem  at  first  to  be  founded  somewhat 
insubstantially  and  artificially,  but  from  year  to  year  their 
inner  life  and  the  sphere  of  their  activities  will  grow.     First 


THE  ECONOMIC  LIFE  OF  CENTRAL  EUROPE    145 

there  is  the  ab-eady  existing  mutual  interchange  of  members 
by  migration  across  the  frontiers,  the  mutual  recognition  of 
membership  rights  which  have  been  won,  the  partnership  in 
union  hterature,  and  where  necessary  its  translation.  Then 
follows  the  closer  combination  of  cartells,  banks,  insurance 
institutions  and  credit  banks.  In  the  first  instance  people 
will  draw  together  through  the  adjustment  of  statutes,  the 
examination  of  differences,  the  insertion  of  guarantee 
clauses,  until  the  two  machines  wiU  one  day  agree  so  closely 
that  they  could  be  made  into  one  without  any  great  shock. 
All  that  need  be  demanded  of  the  Governments  in  this 
connection  is  that  they  do  not  hinder  and  that  they  remove 
any  obstacles,  such  as  legal  definitions  concerning  the  right 
to  form  unions  or  other  difficulties  of  a  similar  nature.  The 
people  themselves  must  desire  to  combine  together  in  their 
workers'  organisations.  If  this  is  not  the  case,  mere  talking 
round  the  subject  by  outsiders  will  be  in  vain. 

Will  this  be  the  case  ?  Now,  after  the  war,  the  attempt 
must  be  made.  Now  is  the  right  time  for  it.  Workpeople 
of  Central  Europe,  we  caU  upon  you  ! 


CHAPTER  V 

JOINT  PROBLEMS  IN  WAR  ECONOMICS 

Before  the  war  we  all  lived  in  an  age  of  growing  inter- 
national commerce.  Each  year  we  bought  more  from 
foreign  markets  and  worked  for  and  sold  more  to  foreign 
nations.  It  is  true  that  this  was  partially  restricted  on  the 
frontiers  and  at  the  ports  by  tariffs  and  similar  measures, 
but  these  protective  or  prohibitive  tendencies  could  not  stop 
the  process  of  development  altogether,  and  indeed  were 
hardly  intended  to  do  so.  They  were  rather  intended  to 
regulate  prices  than  to  guide  economic  development.  When 
once  modern  means  of  intercommunication  have  been 
established  it  is  impossible  to  prevent  them  from  leading  to 
the  foundation  of  an  extensive  system  of  international 
exchange.  Our  consumption  internationahses  itself  in  regard 
to  all  sorts  of  materials  and  departments  of  demand,  and  this 
applies  not  only  to  the  consumption  of  luxuries,  which  has 
always  had  something  of  an  international  character,  .but 
also  to  the  demands  of  the  masses.  Ever5rwhere,  from 
upper  and  lower  sections  of  the  population,  there  is  a 
demand  for  means  of  enjoyment  which  the  home  country 
cannot  supply ;  clothing  is  worn  the  stuff  for  which  is 
not  produced  by  us  ;  we  make  up  materials  which  our 
own  soil  does  not  supply.  Each  of  us  needs  only  to  in- 
quire into  the  country  of  origin  of  the  things  he  uses  daily 
to  show  him  how  much  of  an  international  person  he  is,  and 
how  far  removed  he  is  from  our  simple  forefathers,  who 
dressed  in  home-grown  woollens  and  ate  flummery  and 
groats.  This  universal  progress  towards  economic  exchange 
will  not  cease  after  the  war ;  in  spite  of  all  attempts  to 
prevent  it,  it  will  increase  yet  further  with  the  age  of  inter- 

146 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      147 

communication,  so  soon  as  our  railways  have  again  free 
access  to  all  parts  of  the  world  and  our  ports  are  again 
loading  and  unloading  as  abundantly  and  actively  as 
before. 

The  war  has,  however,  signified  an  important  epoch  in 
this  development  of  international  trade,  for  it  has  and  still 
does  signify  for  Central  Europe  a  breaking  off  of  its  world 
commerce.  By  the  will  of  England  we  are  almost  com- 
pletely shut  off  from  our  wide  foreign  trade.  We  Germans 
and  Austrians  and  Hungarians  have  together  gone  through 
this  notable  economic  experience  ;  we  sat,  or  rather  sit 
together  in  an  economic  prison.  This  is  a  partnership 
whose  whole  significance  we  shall  only  reaHse  when  the 
closed  doors  are  open  again  and  we  begin  once  more  to 
trade  with  the  world  which  has  been  shut  off  from  us  for  a 
considerable  time,  and  which  has  not  had  just  this  experience 
of  ours.  After  the  war  every  nation  will  have  economic  dis- 
turbances to  relate  ;  all  will  welcome  the  new  possibilities  of 
exchange.  But  we  Central  Europeans  shall  have  learnt  and 
endured  something  definite  and  pecuHar,  for  we  have 
actually  been  a  "  self-contained  commercial  State  " — that 
bold  dream  of  the  German  philosopher  Fichte  which  has 
become  a  reaUty  to  us  during  the  war  owing  to  fate  and  our 
geographical  position.  Our  enemies  wished  to  do  us  an 
injury,  but  God,  the  God  whom  Fichte  believed  in  and 
preached,  has  thought  to  turn  it  into  a  blessing. 

It  is  a  characteristically  English  notion  to  wish  to  humble 
and  punish  us  by  cutting  off  our  foreign  trade.  England 
created  overseas  foreign  trade  and  permits  those  who 
acquiesce  in  her  leadership  to  take  part  in  it.  That  is  the 
meaning  of  the  phrase  Command  of  the  Seas  :  we  have 
in  the  past  underestimated  the  importance  of  the  Enghsh 
power  at  sea.  We  knew  well  enough  that  the  English 
controlled  the  most  ports,  coaling  stations,  maritime  routes 
and  cables,  but  since  we  could  use  them  all  too  we  did  not 
think  it  particularly  hard  that  they  should  have  practically 
sole  command  of  the  machinery.  And  the  English  for 
their  part  were  not  illiberal  in  the  exercise  of  their  power 


148  CENTRAL  EUROPE 

during  the  years  of  peace,  since  for  a  long  time  they  them- 
selves had  been  accustomed  to  think  in  terms  of  exchange 
and  of  international  trade.  According  to  their  economic 
doctrine  of  Free  Trade  and  the  joys  of  commerce,  the  happi- 
ness of  mankind  consisted  in  access  to  their  world-encircling 
system  of  exchange.  The  Enghsh  necessarily  regard  it  as 
the  greatest  penalty  on  earth  for  a  nation  to  be  excluded 
from  the  fehcitous  system  of  exchange  because,  for  England, 
it  would  in  fact  be  fatal.  Exclusion  is  to  be  put  out  of 
the  sun  into  the  shade.  When  the  Enghshman  travelled 
round  the  world  he  was  proud  to  belong  to  the  nation  which 
controlled  this  universally  beneficent  system ;  moreover, 
he  considered  how  it  might  be  to  put  a  refractory  person 
into  confinement  so  as  to  reduce  him  to  bread  and  water. 
And  such  thoughts  occurred  readily  to  Englishmen  because 
they  have  had  to  record  in  their  history  the  Napoleonic 
continental  blockade,  the  first  great  economic  war  in  the 
history  of  the  world.  Unfortunately  aU  this  has  for  long 
not  concerned  us  in  the  same  degree.  We  have  indeed 
often  talked  about  the  possibiUty  that  England  would  one 
day  cut  us  off  from  our  access  to  foreign  countries,  but  we 
have  never  seriously  thought  it  over.  Had  we  thought  it 
out  thoroughly  we  should  have  been  economically  prepared 
for  it  in  a  very  different  fashion.  I  remember  many  dis- 
cussions in  which,  before  the  war,  we  spoke  of  the  possi- 
biUties  of  exclusion.  Generally  the  dependence  of  neutrals 
on  the  English  system  was  taken  for  much  less  than  it  has 
been  in  reality.  In  general,  too,  only  bread-corn  was 
spoken  of,  seldom  fodder  for  cattle,  and  stiU  more  rarely  the 
other  branches  of  our  imports.  But  England,  on  the  other 
hand,  had  a  much  more  adequate  notion  of  the  kind  of 
weapon  that  lay  ready  to  her  hand.  She  examined  our 
annual  imports  and  secretly  rejoiced  at  the  thought  of  the 
day  when  she  would  force  us  to  our  knees  by  threatening  to 
cut  us  off  from  commerce  or  by  actually  doing  so.  It  must 
be  acknowledged  that  our  economic  dependence  was  better 
known  in  the  Foreign  Office  in  London  than  in  the  corre- 
sponding   of&ces    in    Berlin    and    Vienna.     Without    this 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      149 

knowledge  England  would  not  have  used  for  her  own 
settlement  of  accounts  with  Germany  the  war  on  two 
frontiers  which  we  had  to  fight  out  with  France  and  Russia. 
She  thought  herself  sure  of  her  ground  :  to  exclude  imports 
from  Central  Europe  must  of  itself  bring  about  a  deprivation 
of  food  and  of  work !  He  who  does  not  belong  to  the 
world's  economic  system  must  die  ! 


In  preparing  this  careful  and  malicious  plan  of  blockade  the 
EngUsh  were  very  clever  in  regard  to  our  economic  position, 
but  yet  they  miscalculated.  They  omitted  two  things  from 
their  estimate  :  liie  powerful  counter-effect  of  the  exclusion 
of  such  a  big  economic  area  on  the  countries  remaining 
in  the  international  union,  and  the  stores  in  Central  Europe 
not  previously  included  in  any  statistics.  We  must  examine 
this  latter  point  more  closely  because  it  will  have  further 
results  in  the  future.  The  plan  of  blockade  was,  so  to 
speak,  abstract  economics.  The  statistical  year-books  of 
the  Central  European  States  were  looked  at  in  London, 
and  it  Wcis  read  .therein  how  much  bread-corn,  fodder, 
cotton,  wool,  copper,  leather,  saltpetre,  iron  ore,  char- 
coal, rice,  tobacco,  coffee  and  rubber  we  used  annually. 
The  total  record  was  of  miUions  of  tons,  milliards  of  marks 
and  kronen  :  this  represented  the  annual  demand  !  This 
amount  would  not  be  bought  and  paid  for  annually  by  the 
Germans  and  Austrians,  so  the  reasoning  went  on.  if  they 
had  not  serious  need  of  it  every  year  !  Thus,  if  the  larger 
half  alone  could  be  cut  off,  poor  Central  Europe  would  be 
conquered.  This  manner  of  calculating  we  are  sufficiently 
famihar  with,  since  we  have  partially  appHed  it  during 
the  war  in  much  the  same  way  to  the  question  of  food- 
supply.  Our  food  professors,  and  we  with  them,  said  : 
there  is  lacking  such  and  such  an  amount,  and  conse- 
quently we  cannot  hold  out  without  the  most  severe 
exertions !  In  this  view  we  were  further  strongly  con- 
firmed by  the  amazingly  low  estimates  of  existing  stocks 
of  com  and  potatoes  which  were  made  by  producers  and 


150  CENTRAL  EUROPE 

owners.  We  had  received  somewhat  false  estimates  pre- 
viously, and  had  made  mental  allowances  for  them,  but 
that  the  first  direct  attempt  at  a  Government  inventory  of 
the  quantity  of  food-stuffs  should  yield  such  false  results 
was  beyond  all  expectation,  for  we  are  accustomed  to  much 
greater  accuracy  in  the  case  of  taxes  on  income  and  property. 
This  is  only  mentioned  here  in  order  to  point  out  that  an 
economic  opinion  or  general  rule  based  on  existing  statistical 
material  may  be  correct,  and  yet  false  as  to  facts.  Accord- 
ing to  calculation  our  anxieties  and  the  EngUsh  scheme  were 
quite  correct,  but  fortunately  the  actual  stock  of  all  necessary 
articles  was  much  greater  than  any  economist  beUeved,  We 
were  not  living  so  much  from  hand  to  mouth  as  was 
supposed  by  the  EngUsh  and  by  the  German  statisticians. 
Our  economic  system  had  been  much  more  prudent  than 
we  thought  and  very  sound  in  its  storing  up  of  goods.  We, 
as  a  whole  country,  have  had  the  experience  which  often, 
though  unfortunately  not  always,  falls  to  the  lot  of  besieged 
fortresses,  viz.  that  they  can  hold  out  months  longer  than  is 
possible  according  to  their  inventory  of  goods.  It  was 
amazing  what  turned  up  out  of  all  sorts  of  corners  and  how 
resourceful  people  became  in  finding  out  every  usable 
material.  We  remember  how  for  some  time  wool  ran  short ; 
seek  and  ye  shall  find  !  Some  appeared  from  abroad  in 
defiance  of  England's  threats,  whether  openly  or  secretly 
and  with  or  without  a  gift  in  return,  but  much  more  sneaked 
out  of  our  own  coffers  and  bales.  We  thought  for  a  long 
time,  and  perhaps  still  think,  that  copper  would  run  short. 
Hence  we  began  to  notice  for  the  first  time  that  there  was 
copper  everywhere  that  could  be  taken  and  recast.  When- 
ever a  material  was  lacking  people  looked  for  or  invented  a 
substitute.  We  still  do  not  know  what  new  discoveries  and 
contrivances  wiU  come  permanently  into  use  in  consequence 
of  the  needs  of  this  war,  but  hardly  any  part  of  its  history 
will  subsequently  be  so  interesting  as  this.  Just  as  a 
hundred  years  ago  beet  sugar  and  continental  cotton 
printing  were  introduced  on  the  isolated  continent  in 
consequence  of    the  English  continental  blockade  in  the 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      151 

time  of  Napoleon,  so  an  industrial  resourcefulness  will  date 
from  the  time  of  this  Central  European  war  of  ours,  which 
will  make  us  much  more  independent  than  before.  This 
school  to  which  we  have  been  forcibly  sent  is  strict  and 
arduous  but  yet  useful  and  beneficial.  We  are  learning  to 
stand  on  our  own  feet  in  international  commerce.  Neither 
England  nor  France  are  learning  this ;  this  school  is  our 
privilege,  the  silver  Uning  to  our  cloud ;  it  constitutes 
a  special  Central  European  experience.  Together  we  have 
accomplished  something  remarkable,  not  only  from  a 
miUtary  but  also  from  an  economic  point  of  view.  This  is 
the  introduction  to  the  joint  economic  organisation  we  are 
going  to  have  in  the  future.  We  shall  energe  from  the  war, 
whether  we  wish  it  or  not,  Uke  boys  who  have  sat  together 
on  the  same  bench  in  school.  From  Hamburg  to  Trieste 
and  Fiume  our  economic  designs  have  been  forced  in  a  Uke 
direction  :  a  system  of  storage  and  a  system  of  adaptabiUty 
with  a  view  to  independence  ! 


We  may  be  allowed  to  enter  somewhat  more  closely  into 
our  important  economic  experience  during  the  war,  even  if 
it  apparently  leads  us  away  from  the  Central  European 
question.  It  will  be  seen  later  that  we  have  not  thereby 
forgotten  the  object  of  our  work.  In  this  connection  we 
shall  speak  first  more  fully  of  the  experiences  of  the  German 
Empire,  assuming  that  they  apply  in  their  degree  to  Austria 
and  Hungary. 

The  English  war  of  exclusion  was  based  on  ideas  that 
were  correct  according  to  the  figures,  but  were  inorganic. 
That  is  to  say  :  the  individual  economic  events  were  looked 
at  in  isolation,  but  not  thoroughly  grasped  as  simultaneous 
and  reciprocal  in  effect.    The  following  principles  are  correct : 

{a)  If  a  nation  suffers  a  serious  and  rapidly  effective 
deprivation  of  raw  material  and  markets  owing  to  its 
exclusion  from  international  commerce,  violent  disturbances 
and  economic  catastrophes  must  occur  in  it. 

{b)  If   a  nation  is   deprived  of  about   one-sixth   of  its 


152  CENTRAL  EUROPE 

accustomed  food-supply,  and  a  much  greater  proportion  of 
its  fodder,  scarcity,  dearness  and  famine  are  inevitable 
amongst  the  poorer  classes. 

(c)  If  a  nation  is  obHged  to  send  a  twelfth  or  a  tenth 
part  of  its  population  away  from  their  civil  occupations  into 
miUtary  service,  all  trades  and  all  equiUbrium  between 
interdependent  stages  of  work  will  be  so  disturbed  that 
economic  chaos  will  supervene  in  proportion  as  industriaUsm 
was  developed. 

Thus  the  German  economic  system  ought  to  have  crumbled 
up  in  three  directions  at  once  :  want  of  supplies  and  markets, 
want  of  food-stuffs  and  want  of  work.  And  indeed  we 
watched  these  three  dangers  drawing  near  Uke  grey  clouds 
in  the  sky.  I  can  think  of  many  meetings  and  discussions 
in  August  and  September  1914,  in  which  people  tried  to 
devise  precautions  against  the  expected  state  of  distress. 
We  counted  on  much  more  disturbance  and  poverty  than 
subsequently  occurred.  To  our  deUghted  surprise  all  these 
matters  settled  themselves  much  more  readily  than  we 
could  have  expected  because  one  need  cured  another. 

If  we  suppose  that  we  had  suffered  an  economic  exclusion 
from  international  trade  without  having  war  at  the  same 
time  (it  is  merely  a  theoretical  supposition,  since  exclusion 
would  at  once  force  us  to  declare  war),  it  wiU  be  admitted 
that  we  should  have  had  all  our  working  abihty  sitting  at 
home  and  no  systematic  imports  or  exports — it  would  have 
been  intolerable  !  That  would  be  the  most  serious  economic 
crisis  that  can  be  imagined.  But  since  the  disturbance  of 
trade  happened  simultaneously  with  the  summoning  of  men 
to  the  army,  something  took  place  which,  to  use  an  expression 
borrowed  from  Leibniz,  may  be  described  as  "  pre-estabhshed 
harmony,"  as  a  providential  arrangement ;  for  the  curve 
of  men  called  up  and  the  curve  of  loss  of  work  mutually 
counteracted  one  another.  That  need  not  have  been  so, 
but  it  was  so. 

If  we  suppose,  further,  that  we  had  suffered  the  depriva- 
tion of  food-suppUes  under  the  laws  of  peace  time,  it  would 
probably  have  led  to  the  most  extreme  scarcity,  usury  and 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      153 

hunger  riots.  But  since  martial  law  was  in  force  it  was 
possible  to  carry  out  in  a  few  months  a  policy  which  would 
otherwise  have  needed  a  lifetime  of  discussions  :  the  declara- 
tion that  all  necessary  stocks  were  State  property,  and  the 
substitution  of  pubUc  officials  and  Government  companies 
for  private  trade.  State  Socialism  made  giant  strides 
forward  in  a  single  night.  Before  the  war  it  was  axiomatic 
that,  "  I  can  do  what  I  like  with  my  own  potatoes."  Now 
this  axiom  holds  :  "  Your  potatoes  are  our  potatoes."  We 
do  not  yet  know  how  it  will  run  after  the  war.  The  old 
state  of  things  will  certainly  not  come  back  again  entirely 
since  the  beneficial  possibihties  of  the  concept  of  State 
Sociahsm  have  become  too  obvious,  and  since  we  shall  keep 
in  mind  the  economic  experiences  of  the  war. 

But  all  this  involved  an  unheard-of  labour  of  organisation, 
for  the  balance  between  the  calling  up  to  the  army  and 
the  decreasing  emplo5niient  did  not  come  about  of  itself, 
and  the  taking  over  of  raw  material  and  food-stuffs  by 
the  War  Purchase  Companies  and  the  War  Corn  or  Potato 
Companies  was  and  is  stiU  no  small  trouble.  In  peace 
time  Government  Offices  would  have  been  very  timid 
about  both  measures,  but  as  it  was  they  had  to  attack 
the  work  with  half  the  usual  official  staff  and  it  was  a 
success.  They  would  have  been  much  less  successful  in 
peace  time  for  then  every  one  would  have  presumed  upon 
his  accustomed  rights,  but  the  war  conferred  undreamed-of 
powers  :  you  must,  you  ought,  you  can  !  A  wiUing  people 
with  an  economic  dictatorship  voluntarily  endured,  can  do 
infinite  things.  The  dictatorship  was  incomplete,  for  here 
too  previous  mobihsation  was  lacking,  but  it  became  effective 
by  degrees.  What  we  see  around  us  is  certainly  not  exactly 
what,  in  Karl  Marx's  phrase,  is  termed  "  the  Dictatorship  of 
the  Proletariat,"  but  we  are  yet  reminded  of  the  expression 
in  some  respects  :  a  step  towards  sociahsm  under  the  leader- 
ship of  the  Government !  It  is  an  economic  dictatorship  of 
Government  Offices  advised  and  supported  by  those  most 
nearly  affected. 


154  CENTRAL  EUROPE 

The  great  and  unusual  changes  m  the  economic  system 
during  the  war  were  accomplished,  notwithstanding  aU 
unavoidable  friction,  with  comparative  ease,  which  would 
not  have  happened  if  there  had  not  been  a  remarkable 
mobility  of  money  and  labour.  Neither  was  taken  for 
granted  at  the  outset,  either  by  the  calculating  EngUsh  or 
by  the  many  anxious  Germans.  We  had,  almost  without 
exception,  no  adequate  idea  of  the  demands  of  a  modern 
war.  We  only  now  know  what  masses  of  material  it 
recklessly  swallows  up  each  day.  It  uses  much  more  than 
even  the  boldest  imaginations  had  supposed,  much  more 
munitions,  weapons,  artillery,  horses,  wagons,  motor-cars, 
tires,  cement,  wood,  corrugated  iron,  wire,  leather,  clothing 
material,  chemicals,  field-glasses,  cooking  apparatus,  jams 
and  a  hundred  other  things,  which  hardly  any  one  had  pre- 
viously thought  of  as  needed  by  an  army.  The  Army 
became  the  most  important  purchaser  and  orderer.  Like  a 
giant  turtle  rising  out  of  the  water  this  enormous  purchaser 
climbed  up  in  a  few  months  and  replaced  the  lost  foreign 
customers.  MilUards  were  lacking  in  commerce,  but  mil- 
liards were  paid  out  in  compensation  by  the  military  officials. 
Money  flowed  in.  Even  if  it  flowed  in  rather  unsystemati- 
cally  at  times,  yet  the  main  point,  from  the  economic  point 
of  view,  is  that  it  did  flow.  Only  in  a  few  trades  was  there  a 
complete  stoppage,  in  many  more  we  experienced  obstacles, 
rearrangements,  half-time,  in  not  a  few  there  was  high  pres- 
sure with  night  work,  overtime,  high  wages  and  great,  some- 
times excessive  profits.  The  home  country  became,  so  to 
speak,  one  large  factory  for  the  war.  The  war  was  the  con- 
tinuation of  the  national  economic  system.  The  wheels 
rolled  onwards. 

It  was  thus  that  we  first  fully  learnt  the  meaning  of  the 
words  "  national  economics."  We  had  frequently  had  it 
on  our  lips  when  we  said  that  national  economics  stood 
between  private  economics  and  international  economics. 
But  apart  from  tariff  questions  and  socio-political  laws,  the 
peculiarity  of  national  economics  as  such,  the  supremacy  of 
national  economic  ideas  had  not  yet  entered  into  our  heads. 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      155 

People  suspected  indeed  that  in  between  private  economics 
and  international  economics  there  existed  a  special  and 
peculiar  principle  of  organisation,  but  had  not  yet  worked 
it  out  really  definitely  :  the  economic  maintenance  of  the 
State.  The  State  needed  first  to  fight  for  its  life  before  it 
could  attain  mighty  independence  and  make  itself  at  once  the 
purpose  and  the  director  of  the  whole  process  of  production. 

That  we  Germans  have  glided  into  this  State  Socialism, 
or  into  this  national  economic  business  (for  that  is  strictly 
what  it  is),  as  if  it  had  always  been  our  natural  habit — that 
is  what  we  have  learnt  about  ourselves  during  this  war. 
When  we  emerge  from  the  war  we  shall  no  longer  be  the  same 
economic  beings  as  before.  The  period  of  essential  indi- 
viduaUsm,  the  period  of  imitation  of  the  already  declining 
English  economic  system  is  thus  gone  by,  but  so  also  is  the 
period  of  an  internationalism  boldly  looking  beyond  the 
existing  State.  By  reason  of  our  experiences  during  the  war 
we  demand  an  ordered  economic  system  :  the  regulation  of 
production  from  the  standpoint  of  pohtical  necessity. 
Similar  impulses  will  indeed  show  themselves  independently 
in  the  world  amongst  other  nations,  even  amongst  the 
English,  but  with  us,  in  our  isolated  State,  they  have  matured 
more  than  anywhere  else.  We  brought  to  it  the  German 
spirit  of  organisation  described  above,  and  the  war  has 
wrought  it  into  permanence.  This  is  an  occurrence  of  the 
first  importance  in  international  economics,  and  it  will 
probably  be  much  better  and  more  clearly  understood  in  its 
far-reaching  significance  by  later  generations  than  by  us 
who  have  first  experienced  it. 

There  is  in  this  a  certain  reconciliation  between  the 
economic  conception  of  national  citizenship  and  that  of 
socialism.  Even  before  the  war  we  knew  that  the  opposi- 
tion was  decreasing,  since  producers  were  organising  them- 
selves and  workers  were  carrjdng  out  a  strong  and  realistic 
trade-union  pohcy  within  the  existing  State.  Even  before 
the  war  the  theories  of  both  sides  were  further  separated  than 
their  practice.  But  now  the  practice  of  war  has  accom- 
plished a  notable  work  :   the  dispute  about  the  management 


156  CENTRAL  EUROPE 

of  labour  and  the  produce  of  labour  continues,  but  the  process 
of  labour  itself  is  grasped,  above  all  during  the  war,  as 
above  party  and  of  common  interest :  we  are  a  nation, 
and  have  learnt  and  discovered  our  national  economics  in 
the  midst  of  a  world  of  enemies  and  in  an  economic  prison. 
This  will  remain  as  a  background  for  everything  that  may 
befall  later  on. 

****** 
But  the  State,  when  it  appears  thus  as  a  giant  customer, 
needs  much  money  which  cannot  be  obtained  from  abroad. 
From  the  outset  Havenstein,  the  Director  of  the  Reichsbank, 
as  General  of  Finance,  took  his  place  by  the  side  of  State 
Secretary  Delbriick,  the  General  of  Administration.  These 
two  men  have  become  historical  figures  just  as  much  as 
Hindenburg  and  Mackensen.  Had  it  not  been  for  their 
work  much  trouble  would  have  been  wasted.  Havenstein  has 
enabled  the  German  Empire  to  raise  the  loans  of  milliards 
and  thus  kept  the  war  going  effectively.  And  this  he  has 
accomplished  without  a  moratorium,  that  is  without  per- 
mitting financial  uncertainty,  and  without  giving  up  the 
principle  of  a  gold  cover  against  note  issue.  He  issued 
money  in  the  first  instance  before  drawing  it  in  again  as  a 
loan.  He  issued  it  in  the  self-contained  commercial  State 
where  it  could  not  be  lost  to  the  nation.  These  loans  would 
have  been  inconceivable  without  the  war,  for  then  the 
increased  capital  would  have  passed  into  buildings, 
machinery,  fresh  enterprises  or  foreign  investments.  But 
now  that  there  were  hardly  any  new  enterprises,  these  loans 
proved  the  only  salvation  of  a  capitaHsm  that  would  other- 
wise have  been  ruined.  Havenstein's  financial  policy  saved 
it  and  the  Fatherland  at  the  same  time.  And  meanwhile, 
under  the  auspices  of  the  Imperial  Home  Office  the  capitalism 
and  industriaUsm  thus  supported  by  the  State  was  con- 
strained into  stable  paths  and  trained  to  efficient  poUtical 
assistance.  State  Secretary  Delbriick  succeeded  in  forming 
a  national  economic  War  State  out  of  the  individualistic 
economic  Peace  State  without  dispensing  with  the  parlia- 
mentary system,  and  in  lajdng  the  foimdation  lines  of  an 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      157 

economic  system  which  will  have  much  broader  results  than 
the  majority  of  people  dream  of  to-day.  When  our  troops 
return  home  they  will  find  another  Germany,  but  they 
themselves  will  in  the  interval  have  experienced  the  Ufe  and 
death  sociahsm  of  war,  so  that  what  they  find  will  seem  to 
them  Uke  their  own  flesh  and  blood. 

But  whilst  we  keep  up  our  military  power  in  this  way  by 
loans  and  organisation,  we  burden  the  future  with  far- 
reaching  obUgations,  with  the  duty  of  passing  over  from  a 
war  organisation  to  an  orderly  condition  of  peace  and  with 
the  duty  of  beginning  a  poUcy  of  finance  and  of  taxation 
which  will  discover  a  way  out  of  the  debt.  Both  tasks  are 
in  close  connection  with  one  another,  as  the  veriest  outsider 
will  admit.  We  will  begin  the  discussion  of  these  connected 
duties  with  the  financial  side. 

No  one  yet  knows  how  great  our  Imperial  debt  wiU  be  at 
the  end  of  the  war,  and  whether  and  to  what  extent  the 
payment  of  war  indemnities  may  be  counted  upon.  Owing 
to  this  uncertainty  we  avoid  any  estimate  in  figures.  So 
much  is,  however,  certain :  that  we  shall  have  to  raise  a 
very  large  sum  which  cannot  be  met  by  a  rise  in  the  existing 
taxes.  Every  form  of  taxation  carries  its  own  limits 
within  itself.  In  the  past  time  before  the  war  I  calculated 
that  the  wealthy  classes  paid  down,  in  various  ways,  one- 
sixth  of  their  incomes  to  Empire,  State  and  Commune. 
There  were  local  differences,  but  prolonged  observation  has 
convinced  me  of  the  truth  of  a  South  German  banker's 
remark :  "  We  work  for  the  State  for  two  months  in  the 
year  I  "  In  like  manner  I  calculate  that  a  man  Hving  on 
his  wages  also  gives,  in  the  form  of  direct  and  more  especially 
of  indirect  taxes,  about  one-sixth  of  his  income  to  the 
State  (and  also  to  the  classes  assisted  by  the  national  tariff 
poUcy).  Owing  to  these  already  existing  imposts  on  pro- 
duction both  sections  are  sensitive  to  any  new  burdens 
imposed  in  the  old  forms.  New  methods  of  taxation  must 
be  sought  for,  if  the  burden  of  the  war  (loans,  new  con- 
structions, payments  to  invalids,  pensions)  are  to  be  met. 
This  is  an  occasion  when  the  financial  obhgations  arising 


158  CENTRAL  EUROPE 

out  of  the  war  must  lead  to  fresh  organisation.  The  new 
phenomenon  which  gives  warning  of  its  approach  may  be 
called  either  a  State  industrial  monopoly  or  the  taxation  of 
syndicates,  but  these  are  in  essence  only  two  different 
expressions  for  the  same  thing. 
.  ****** 

Forty  years  ago  when  sociahst  problems  made  their 
appearance  there  were  three  kinds  of  theoretical  sociahsm  : 
State  Socialism,  Producers'  Sociahsm  and  Workers'  Sociahsm. 

State  Sociahsm  was  the  concept  of  taking  over  a  larger 
section  of  industrial  hfe  into  direct  State  control,  after  the 
manner  of  the  nationahsed  railways  and  post  office,  and  in 
this  way  of  meeting  the  financial  requirements  of  the  State. 

Producers'  Sociahsm  was  the  concept  of  creating  a  self- 
administrating  and  self-governing  body  out  of  the  property- 
owning  and  industrial  classes  by  combining  the  great 
industrial  and  agricultural  federations,  and  thus  reducing 
mutual  competition. 

Workers'  Sociahsm  was  the  idea  of  weakening  the  authorit}' 
of  the  employers  by  combinations  of  both  the  upper  and  the 
lower  labour  forces  and  of  the  consumers,  and  of  a  transition 
to  self-government  by  the  working  masses,  and  thus  securing 
for  the  workers  the  employers'  profits. 

Each  of  these  three  forms  has  made  progress,  but  no  one 
of  them  alone  has  become  the  determinative  basis  of  the 
period.  The  air  has  been  full  of  attempts  at  organisation 
without  any  final  general  concept  of  this  development 
emerging.  It  can  only  be  said  that  a  more  complete  victory 
of  any  one  of  the  normal  types  appeared  out  of  the  ques- 
tion. But  in  the  meanwhile  intermediate  forms  made  their 
appearance,  which  combined  two  or  even  all  three  of  the 
basal  ideas  :  combined  management,  communal  joint-stock 
companies.  State  syndicates,  tariff  union  enterprises,  pubhc 
management  with  private  shareholders  and  employees 
resembhng  officials.  All  this  seemed  to  those  not  concerned 
therein  to  be  very  complex  and  hard  to  understand,  but  to 
those  in  the  midst  of  things  it  all  soon  became  quite  easily 
managed  and  practicable.     Almost  all  the  big  town  councils 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      159 

started  enterprises  in  combined  management,  gas  and 
electricitj'  works,  tramways,  slaughter-houses,  companies  for 
workmen's  dweUings,  in  which  communal  socialism  appeared 
as  a  pioneer  in  future  methods  of  business  arrangement. 
The  best  known  of  these  enterprises  is  the  alkali  monopoly, 
with  its  imperial  protection,  imperial  compulsion  and  work- 
man's insurance.  The  correctness  of  its  poUcy  in  details  is 
much  disputed,  but  the  constructive  idea  underlying  it  has 
already  been  recognised  as  a  new  basal  form.  When  the 
petroleum  monopoly  was  under  consideration  people  went 
back  to  a  similar  train  of  reasoning.  The  State  does  not 
thereby  become  a  monopolist  pure  and  simple,  but  it  holds 
a  decisive  number  of  shares  and  controls  its  portion  and  also 
the  terms  of  payment  for  employees  and  workpeople.  An 
arrangement  of  this  sort  has  the  value  of  a  new  invention 
in  national  economic  machinery,  which  may  perhaps  be 
compared  to  the  invention  of  balloons.  The  apparatus  of 
aeronautics  also  resulted  from  a  combination  of  different 
existing  models  and  technical  expedients.  We  shall  not 
assert  that  the  social  problem  is  "  solved  "  by  the  combined 
t5^es  of  management  of  State  joint-stock  companies  or 
State  sjmdicates,  but  it  will  be  admitted  that  herein  is 
proclaimed  something  that  has  been  demanded  through  long 
decades.  This  roughly  was  the  position  before  the  war. 
And  the  war  has  matured  these  beginnings. 

Now  for  the  time  the  war  freed  us  from  all  the  control  of 
theoretical  principles  and  forced  us  to  organise  solely  for 
practical  ends.  And  it  immediately  became  evident  that 
Government,  producers'  syndicates  and  workmens'  trade 
unions  are  only  organs  of  a  common  system  of  life,  of  the 
economic  nation.  In  order  to  carry  out  the  immense  tasks 
of  war  economics  all  the  usual  dogmatism  had  to  be  thrown 
aside  and  people  had  to  see  how  the  most  effective  type  of 
administration  might  be  estabUshed  with  the  peaceable  and 
active  participation  of  all  required  energies.  Much  has  been 
left  indefinite  during  the  process,  in  particular  guarantees  to 
workers  and  employees  in  the  combined  management  of 
national  economic  enterprises,  but  the  different  State  joint- 


i6o  CENTRAL  EUROPE 

stock  companies  for  war  purchase,  for  military  supplies, 
for  food  administration  embody  evident  future  develop- 
ments. They  are  present  to  the  minds  of  those  who  have 
to  approach  the  new  financial  problems. 

****** 

To  put  it  briefly  and  in  a  way  generally  comprehensible  : 
financial  poUcy  after  the  war  must  rest  mainly  upon  State 
syndicates  combined  with  guarantees  for  workpeople.  The 
latter  are  an  essential  constituent,  without  which  the  State 
syndicate  would  become  an  instrument  of  class  government, 
and  without  which  no  parUamentary  majority  in  its  favour 
could  be  secured  or  maintained.  For  our  existing  popula- 
tion a  monopoly  without  systematic  limitation  of  its  abso- 
lute control  over  its  workpeople  constitutes  an  intolerable 
menace  to  personal  freedom  and  to  that  standard  of  Ufe 
which  it  wiU  be  difficult  enough  to  maintain  in  face  of  the 
rise  in  prices  that  will  probably  continue  after  the  war. 

Financially  the  State  syndicate  involves  the  imposition  of 
a  tax  obUgation  upon  an  industrial  association  which 
receives  in  compensation  the  right  to  be  the  only  one  of  its 
kind.  To  illustrate  from  the  case  of  the  alcohol  syndicate  : 
the  State  does  not  of  itself  devise  new  taxes  on  pro- 
duction or  manufacture,  but  requires  the  management  of 
the  syndicate  to  produce  the  required  millions  in  what- 
ever way  they  think  wise  commercially.  The  producers 
and  manufacturers  who  do  not  at  present  belong  to 
the  syndicate  have  to  adapt  themselves  to  its  assess- 
ment, which  supphes  a  very  strong  motive  for  joining 
it.  Should  this  syndicate,  based  upon  a  poUtically  favoured 
voluntarism,  break  down  or  for  any  reason  be  discontinued, 
a  Government  tax  on  the  quantities  sold  or  manufactured 
will  be  enforced,  which  prospect  conduces  greatly  to  the 
maintenance  of  the  sjmdicate.  The  settlement  of  prices 
and  the  methods  of  sale  are  the  concerns  of  the  syndicate, 
but  the  State  possesses  a  very  simple  remedy  in  case  of 
excess  or  of  neglect  of  the  workmen's  guarantees  :  it  can 
alter  the  tax  if  required  as  educational  pressure.  This  is 
the  easiest  way  for  the  State  to  secure  simultaneously  money 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      i6i 

and  commercial  pliancy.  The  State  money  will  be 
abstracted  during  the  process  of  production  before  it  has 
become  private  money.  Milliards  must  be  raised  somehow, 
and  consequently  the  national  economic  system  must  be 
burdened  somehow  and  at  some  place.  Wealth  must 
unquestionably  be  withdrawn,  the  only  problem  is  by  what 
method.  The  method  here  indicated  has  the  inmiense 
advantage  over  aU  other  conceivable  ones  in  that  it  makes 
for  commercial  and  technical  concentration  and  improve- 
ment. The  self-interest  of  producers'  associations  is  made 
to  serve  the  interests  of  the  State. 

The  scheme  for  this  method  of  supplying  the  much 
increasing  needs  of  the  State  can  only  be  completely  matured 
in  practice,  and  will  take  different  forms  for  different 
industries.  Alcohol  exists  under  different  conditions  from 
sugar,  sugar  under  different  ones  from  iron  and  steel,  and 
steel  again  under  different  ones  from  coal  or  yarn  or  cement. 
It  can  only  be  determined  step  by  step  which  branches  of 
industry  will  come  in  question.  The  general  principle  is : 
the  more  an  industry  lends  itself  to  the  formation  of  syndi- 
cates the  more  suitable  it  is  for  State  participation. 

This   train   of   thought   will   inevitably   provoke   much 
contradiction  and  many  doubts  at  the  outset,  but  it  will 
probably  meet  with  no  serious  opposition  from  amongst  the 
directors  of  the  existing  syndicates  since  through  it,  in  the 
first   instance,    they   themselves   were   firmly   established. 
Now  they  are  already  not  merely  the  deputies  of  their 
shareholders,  but  at  the  same  time  managers  and  governors 
of  their   departments   of   the   national   economic   system. 
According  to  our  reasoning,  this  will  be  politically  recognised, 
and  it  will  on  the  other  hand  be  recognised  that  the  workers, 
through  their  unions,  are  to  be  represented  on  the  managing 
and  financial  bodies.    The  process  of  evolution  moves  of  itself 
in  the  direction  indicated,  only  it  would  all  have  taken  much 
longer  if  it  had  not  been  accelerated  by  the  financial  need 
of  the  State.    The  war  has  made  all  sections  of  the  nation 
much  more  docile  about  violent  transformations  and  political 
necessities.     Now  an  important  step  may  easily  be  taken 


i62  CENTRAL  EUROPE 

and — ^what  else  could  we  do  ?  We  ask  each  one  who  objects 
to  this  sort  of  scheme,  from  reasons  and  hesitations  which  are 
in  themselves  justified,  how  he  himself  thinks  of  obtaining 
the  miUiards.    Mere  criticism  avails  nothing  at  all. 


In  addition  to  financial  motives  a  second  great  impelling 
force  in  the  same  direction  is  the  necessity  for  a  State  system 
of  storage. 

Hitherto  we  have  luckily  been  able  to  surmount  the 
Enghsh  blockade  policy  by  means  of  existing  private 
economic  stores,  but  this  basis  is  much  too  insecure  for 
future  war  anxieties.  When  the  war  is  over  we  shall  plan 
a  State  storehouse,  or  one  controlled  by  the  State,  for  the 
most  necessary  materials.  This  may  already  be  described 
as  a  national  demand  without  distinction  of  party.  But 
this  storage  pohcy  is  essentially  an  interference  with  the 
individuahstic  economic  system,  for  it  means  that  in  future 
prices  will  not  determine  themselves  according  to  supply 
and  demand  in  the  old  sense,  but  will  be  Hable  to  influence 
in  an  upward  or  downward  direction  through  the  State 
storehouse.  This  applies  to  all  departments.  The  State, 
by  holding  an  available  reserve  of  copper,  caoutchouc  or 
saltpetre  or  wool  becomes  at  once  a  factor  in  the  market,  an 
agent  in  the  processes  of  exchange.  Preparation  for  an  eco- 
nomic war  thus  leads  here  also  to  a  kind  of  State  sociahsm,  and 
that  of  a  very  obscure  and  unexplored  kind.  As  a  rule  the 
plan  will  not,  for  practical  reasons,  lead  to  an  undisturbed 
store  of  material,  but  rather  to  larger  trade  reserves  than  are 
necessary  for  the  purposes  of  a  purely  private  commercial 
system.  The  attempt  to  establish  the  petroleum  monopoly 
was  an  easily  understood  example  :  either  the  petroleum 
trade  increases  its  reserve  stock  or  the  State  estabUshes  its 
own  storehouse  with  authority  to  trade.  Practically  no 
material  will  bear  storage  for  ten  years,  so  that  any  one  who 
has  a  stock  must  carry  on  sales.  In  a  word,  storage  pohcy 
thus  includes  much  more  than  appears  at  first  sight :  State 
commercial  poHcy. 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      163 

Storage  obligations  must  be  laid  upon  the  syndicates  on 
behalf  of  the  State  in  addition  to  the  financial  obhgations 
referred  to  above,  and  State  commercial  management  or  a 
State  commercial  monopoly  must  be  introduced  for  such 
objects  of  commerce  as  are  not  in  the  hands  of  a  syndicate 
or  cannot  easily  be  so  controlled.  This  appUes  primarily  to 
food-supphes  and  fodder.  Here  the  Government  and  the 
representatives  of  the  people  are  called  upon  to  make 
decisions. 

The  elder  ones  among  us  still  remember  very  well  the 
time,  about  twenty  years  ago,  when  the  "  Kanitz  proposal  " 
was  occupying  all  the  agricultural  conferences.  It  was  the 
idea  of  a  State  monopoly  of  foreign  trade  in  corn.  At  that 
time  these  endeavours  arose  from  the  desire  to  keep  the 
price  of  com,  with  the  help  of  legislation,  at  the  definite 
height  desired  by  the  farmers.  The  prices  demanded  then 
have  now  long  since  become  very  low.  But  in  those  days 
there  was,  in  fact,  much  more  dispute  over  the  amount  of 
the  price  than  over  the  principle  itself.  The  latter,  indeed, 
might  be  opposed  from  the  Liberal,  but  hardly  from  the 
Socialist  standpoint.  However,  the  Social  Democrats  treated 
the  affair  at  the  time  almost  entirely  as  a  temporary  ques- 
tion of  price.  Thus  it  came  about  that  the  Kanitz  proposal 
was  dropped,  and  was  replaced  by  a  strong  and  successful 
agrarian  tariff  agitation.  Now  all  these  already  half  for- 
gotten quarrels  are  being  revived,  but  with  respect  to  the 
storage  poUcy.  The  old  debates  are  taken  up  again  with 
fresh  vigour  under  the  new  conditions.  It  is  a  difficult  task 
to  prophesy  anything  as  to  the  result  of  these  discussions. 
A  useful  proposal  often  breaks  down  for  incidental  reasons. 
But  at  bottom  the  matter  stands  thus  :  if  an  automatic 
method  of  determining  prices  is  agreed  upon  as  between 
agrarians  and  Social  Democrats,  there  will  be  nothing  left 
for  the  rest  of  us  but  to  help  to  estabUsh  the  contrivance, 
or  at  least  not  to  obstruct  the  State  corn  warehouse. 
This  is  essentially  an  outcome  of  the  war.  We  shall 
remain  poUtically  imquiet  until  we  possess  it.  "  National 
economics  "  demands  it  cis  a  necessity  of  State,  m  order  to 


i64  CENTRAL  EUROPE 

make  future  wars  of  starvation  impossible.  Perhaps  this  is 
the  greatest  interference  with  private  economic  enterprise 
which  will  be  introduced  owing  to  the  war,  but  here  too 
we  may  ask :  how  could  we  possibly  do  anything  else  so 
as  to  avoid  future  anxiety  about  starvation  ? 


Of  course  this  is  only  a  very  fragmentary  discussion  of 
the  abundance  of  economic  problems  connected  with  the 
end  of  the  war.  The  transition  from  war  to  peace  forms  a 
chapter  in  itself,  and  might  give  all  statesmen  much  to  think 
over  even  to-day,  although  such  thoughts  run  the  risk  of 
entangling  themselves  in  false  anxieties  and  expectations 
Hke  a  boat  among  reeds.  It  will  be  best  to  try  to  pick  out 
the  elements  of  certainty  first  of  all. 

For  our  economic  system  the  end  of  the  war  will  mean 
the  draining  out  and  emptpng  of  all  stocks  of  imports  and 
materials,  and  consequently  at  the  same  time  an  unnatural 
abundance  of  some  (not  indeed  of  very  many)  export  stocks 
in  such  industries  as  have  wished  to  employ  their  machinery 
and  their  remaining  workpeople  without  being  able  to  join 
in  the  war  industries.  Hence  it  follows  that  there  wiU  be 
a  great  stimulus  to  the  import  trade,  especially  by  sea, 
combined  with  insufficient  facilities  for  transport,  a  fight 
for  ship  space  and  dock  berths,  a  strained  and  heightened 
condition  of  commercial  hfe  with  excessive  prices,  unless 
opportune  regulation  is  introduced  in  this  department. 
Hamburg,  which  has  grown  unnaturally  quiet  during  the 
war,  will  be  reanimated,  but  will  need  prudence  meanwhile, 
like  an  invalid  when  he  first  leaves  the  hospital.  The  same 
thing  will  apply  to  Trieste  and  the  other  ports.  And  also 
to  the  Rhine  navigation. 

Further,  the  end  of  the  war  will  mean  at  the  outset  an 
immediate  replenishing  of  the  military  stores  that  have  now 
become  empty,  since  in  all  human  probability  peace  will 
come  upon  the  world  slowly,  and  not  without  renewed 
risks  of  complications.  As  formerly  at  the  Vienna  Congress, 
and  recently  at  the  London  Conference  at  the  end  of  the 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      165 

Balkan  Wars,  the  international  position  will  remain  very 
insecure,  just  as  rubbish  still  glows  after  a  fire  when  the 
big  flames  have  been  extinguished.  That  is  to  say,  more 
loans  and  more  war  industries  and  works  of  restoration  will 
follow  the  war  immediately,  without  its  being  possible  to 
count  on  any  long  continuance  of  these  renovation  industries. 

The  return  of  the  soldiers  to  civil  Ufe  at  the  end  of  the 
war  will  bring  not  only  joy  but  also  much  trouble.  Only  a 
portion  of  the  number  returning  will  readily  find  their  old 
posts  again.  The  women  will  frequently  be  driven  out  of 
the  occupations  which  they  have  taken  over  in  the  interval, 
small  businesses,  imfortunately,  will  have  in  part  disap- 
peared, and  the  question  of  unemployment  may  result  in 
calamity  after  the  war  if  there  is  any  unwisely  rapid  breaking 
up  of  war  formations.  This  need  not  be  so,  but  it  will  be  if 
mistakes  are  made  or  if  there  is  a  lack  of  precaution. 

The  money  market  will  be  pulled  hither  and  thither  in  a 
thoroughly  embarrassing  manner,  for  the  imposing  unity  of 
the  war  loan  system  will  be  cut  across  by  a  formerly  unknown 
demand  for  private  credit  for  which  at  first  all  basis  will 
be  lacking,  since  all  savings  have  been  absorbed  into  war 
and  communal  loans.  Moreover,  the  filling  of  the  stores 
of  which  we  speak  will  require  money,  and  indeed  the 
exportation  of  money  abroad,  because  imports  will  begin  to 
flow  again  earlier  and  more  extensively  than  exports.  We 
may  have  to  endure  unaccustomed  fluctuations  in  values, 
but  not  we  alone.  The  whole  of  the  international  money 
market  will  be  like  a  storm-tossed  sea,  and  many  businesses 
which  are  still  holding  on  during  the  war  will  be  carried  off 
hke  wreckage  on  the  waves. 

It  is  to  be  supposed  that  the  war  will  conclude  with  a 
big  rise  of  prices  in  all  departments,  in  the  midst  of  which 
legal  maximum  prices  for  important  supplies  could  only  be 
maintained  by  sacrifices  from  the  State  Treasury.  All  the 
accustomed  international  price  standards  will  be  in  doubt 
and  must  be  settled  afresh.  Thus  there  will  be  possibilities 
of  great  profits  and  losses,  and  especially  a  very  painful 
interval  of  social  struggles,  until  prices,  wages  and  salaries 


166  CENTRAL  EUROPE 

have  again  found  a  tolerable  mutual  relationship.  Immense 
problems  will  confront  the  producers'  federations  and  the 
trade  unions  during  this  period.  The  demand  for  housing 
too  will  be  more  disturbed  than  during  the  war,  as  soon  as 
the  war  subsidies  and  the  contributions  of  the  big  munici- 
pahties  cease. 

We  do  not  specify  all  this  in  order  to  spread  fear  and 
anxiety,  but  only  to  show  for  what  reasons  that  trend 
towards  State  Socialism  which  we  have  described  will 
outlast  the  war.  A  nation  that  has  fought  through  a 
war  of  such  unheard-of  difficulty  so  remarkably  will  not 
be  beaten  by  problems  of  this  kind.  It  only  needs 
to  learn  in  due  course  that  the  war  organisation  with 
all,  or  at  least  with  many,  of  its  consequences  must 
be  continued  through  the  peace  preliminaries.  When  the 
doors  of  the  economic  prison  are  opened,  the  prisoner  needs 
a  careful  diet  lest  he  should  be  more  upset  by  freedom  than 
by  his  imprisonment. 

In  other  words,  the  social  struggle  for  existence,  which  is 
now  restrained  by  general  consent  and  regard  for  the  party 
truce,  must  wait  somewhat  longer  before  it  can  take  its 
course  with  its  old  Ucence.  This  is  unpleasant  hearing  for 
all  the  discontented  citizens  of  every  camp  and  party,  for 
they  have  already  collected  material  for  the  day  when  they 
can  attack  one  another  after  the  old  fashion.  But  here,  too, 
reason  will  remain  victorious  over  the  passion,  in  other 
respects  justified,  for  individual  interests.  And  thus  the 
period  after  the  war,  between  imprisonment  and  freedom, 
and  before  the  dawn  of  a  new  future,  will  perhaps  prove  of 
especial  fruitfulness  in  efforts  of  value  for  the  promotion 
of  mutual  understanding.  In  this  connection  I  am  think- 
ing of  the  question,  repeatedly  raised,  of  pubhc  labour 
exchanges,  advised  and  controlled  by  representatives  of 
those  concerned,  of  a  more  settled  arrangement  for  suitable 
arbitration  procedure  in  wages  disputes,  of  the  organisation 
of  house-owners  and  tenants,  of  a  closer  fusion  of  hitherto 
competing  professional  representative  bodies.  All  this  must 
not  be  entered  upon  for  the  sake  of  a  social  theory,  for 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      167 

under  the  circumstances  no  one  has  time  or  mind  for 
academic  reforms,  but  in  aU  probabiUty  the  thing  will  in 
practice  arise  of  itself  out  of  the  peace  difficulties.  The 
social  harvest  of  the  war  will  be  reaped  while  the  party 
truce  is  still  half  maintained,  until  such  time  as  the  poUtical 
heaven  becomes  so  far  clear  that  we  can,  without  risk  or 
injury,  begin  anew  to  quarrel,  as  belongs  to  a  healthy  condi- 
tion of  body  and  soul. 


When,  however,  we  re-enter  the  system  of  world- eco- 
nomics after  the  war,  we  shall  have  been  markedly  changed 
in  the  interval  by  the  pressure  of  our  enemies.  A  much 
more  compact,  self-contained  whole  has  developed  out  of 
our  many-sided  German  system.  We  all  think  much 
more  in  terms  of  State  economy  and  buy  and  sell  much 
more  as  a  whole ;  for  it  is  obvious  that  State  syndicates 
and  State  monopoUes  with  regular  guarantees  for  the 
workpeople  work  differently  from  mere  competing  private 
traders.  Of  course  all  this  appUes  only  to  those  parts 
of  the  German  economic  system  which  are  suited  to  union. 
The  manufacturers  of  finished  goods  are,  as  it  is,  less 
affected  by  the  change,  and  amongst  the  small  farmers 
house  and  farm  will  be  found  faithfully  kept  going  by  wife 
and  children.  The  small  trader,  in  so  far  as  he  returns 
home  safely,  remains  as  he  is,  and  seeks  his  own  markets  in 
the  usual  way.  Above  all,  the  aspect  of  German  foreign 
trade  will  be  changed  if  the  country  comes  forward  as 
buyer  and  seller  in  the  world's  market  in  a  much  more 
compact  shape  in  respect  to  jnany  raw  products.  Foreigners 
will  talk  even  more  than  before  about  German  economic 
mihtarism,  but  we  are  convinced  that  the  enforced  transfor- 
mation of  the  war  period  will  not  suit  us  badly.  The 
organised  economic  State  will  be  strongest  when  the  organisa- 
tion is  able  to  go  on  hving  on  itself.  But  it  is  just  this 
which  we  beUeve  we  have  learnt  to  accompUsh  in  virtue  of 
our  wartime  experiences. 

Of  course  it  is  not  certain  that  all  these  very  complicated 


i68  CENTRAL  EUROPE 

problems  will  be  solved  exactly  as  we  have  briefly  indicated 
here.  There  are  numerous  byways  and  variations.  But 
in  essence  our  account  is  probably  correct.  What  we  have 
described  in  the  previous  section  as  the  German  peculiarity, 
the  vigorous  and  Uving  organisabiUty,  will  be  immensely 
increased  by  the  war.  We  shall  appear  on  the  scene  as 
economically  even  more  German  than  before.  We  shall 
do  this  whether  we  are  alone  or  in  partnership  with  Austria- 
Hungary. 

But  it  is  a  question  and  anxiety  for  Austria  and  Hungary 
whether  or  no  they  desire  and  are  able  to  tread  this  path 
with  us.    This  is  their  problem. 


What  has  Austria-Hungary  accompUshed  during  the  war 
in  the  economic  sphere  ? 

The  first  answer  is  as  follows :  Here  too  things  have 
gone  much  easier  and  better  than  could  have  been  expected. 
Austria  and  Hungary  have  had  their  very  great  racial 
difficulties,  but  as  far  as  the  economic  position  is  concerned 
special  distress  has  only  appeared  in  districts  directly 
affected  by  the  war.  The  sufferings  that  we  have  gone 
through  in  the  parts  of  East  Prussia  that  have  been  occupied 
by  the  Russians  have  lasted  much  longer  in  the  case  of 
Galicia  and  have  affected  a  much  wider  area  of  country. 
Moreover,  in  Bosnia  and  Herzegovina,  so  far  as  can  be 
learnt,  the  disturbances  due  to  the  war  are  not  inconsiderable. 
None  of  this  is  as  bad  as  what  the  French  are  enduring  in 
the  districts  occupied  by  the  German  troops — although  as 
a  matter  of  course  the  Germans  have  shown  much  more 
forbearance  in  respect  to  the  economic  conditions  in  Northern 
France  than  the  Russians  did  in  Gahcia — for  in  North 
France  there  has  been  at  least  a  year's  produce  lost  in 
agriculture  and  very  considerable  industrial  losses  in  the 
French  economic  system.  But  still  the  Austrian  economic 
injuries  are  not  small,  and  the  recovery  from  them  consti- 
tutes a  very  difficult  war  problem.  In  addition  to  the 
financial  problems  which  are  in  any  case  bound  up  with 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      169 

the  war,  there  will  be  the  remaking  of  the  destroyed  roads, 
fortifications,  pubUc  buildings,  schools,  churches,  and  the 
assistance  needed  by  the  population  in  country  and  town 
when  they  take  up  their  systematic  occupations  again. 
Already  in  the  wake  of  the  advancing  army  precautions  are 
taken  and  attempts  made  to  help  where  possible,  but  it  is 
doubtful  how  far  this  can  go  on,  because  the  distribution 
of  the  burden  of  renewal  cannot  be  definitely  settled  from 
the  outset.  Who  will  have  to  pay  ?  Galicia  or  Austria  or 
Austria-Hungary  ?  Here  already  we  come  upon  the  con- 
sideration which  we  regard  as  a  main  problem  for  the  aUied 
States,  and  which  crops  up  in  the  most  varied  directions : 
Are  we  concerned  with  a  single  economic  State  or  with  two 
or  with  several  ? 

When  the  German  Empire  was  founded,  the  desire  to 
estabUsh  an  economic  entity  was  a  principal  object  through- 
out the  whole  historic  movement.  It  is  only  necessary  to 
look  in  the  Constitution  of  the  North  German  Confedera- 
tion and  in  the  German  Imperial  Constitution  based 
upon  it,  at  the  careful  enumeration  of  the  departments 
reserved  for  Imperial  legislation,  in  order  to  realise  how 
deUberately  everything  economic,  with  the  exception  of 
purely  agrarian  legislation,  was  made  the  business  of  the 
Empire.  The  economic  federation  was  formed  out  of  the 
Customs  Union.  Hence  in  individual  cases  it  was  left  for 
future  consideration,  how  far  the  Imperial  legislature  should 
take  over  the  regulation  of  trade,  industry,  financial  law, 
the  bourse,  patents,  social  pohcy  and  the  prevention  of 
adulteration,  but  the  right  to  legislate  on  all  these  matters 
was  firmly  estabUshed,  and  we  have  seen  how  very  exten- 
sively this  right  was  put  into  practice  during  the  next  forty 
years.  In  any  doubtful  case  the  Empire  is  competent  to  act 
if  it  desires  to  do  so ;  only  the  enforcement  and  the  adminis- 
tration appertain  to  the  federated  States.  But  no  such 
economic  unity  exists  in  the  Dual  Monarchy  of  Austria- 
Hungary,  nor  was  it  intended,  but  on  the  contrary  until 
now  it  has  been  expressly  excluded  by  the  fundamental 
law  of  December  21,  1867,  concerning  the  constitutional 


170  CENTRAL  EUROPE 

Ausgleich.  The  true  position  of  the  matter  is  sufl&ciently  well 
known  in  Austria  and  Hungary,  but  must  be  emphasised 
for  readers  in  the  German  Empire,  because  they  are  often 
inclined  to  apply  Imperial  German  conditions  to  Austria- 
Hungary  without  further  ceremony. 

For  the  case  immediately  in  point  this  means  that  accord- 
ing to  the  theory  of  State  rights  and  the  legal  position,  both 
States,  it  is  true,  following  the  provisions  of  the  existing 
settlement,  are  answerable  for  their  joint  possession  of 
Bosnia  and  Herzegovina,  but  not  in  like  manner  for  Galicia. 
The  chief  burden  of  GaUcia  rests  on  the  kingdoms  and  lands 
represented  in  the  Reichsrat.  But  this  burden  may  still 
give  rise  to  comphcated  discussions,  if  say  at  the  end  of  the 
war  a  fresh  section  of  land  that  had  hitherto  been  Russo- 
Polish  were  added  to  the  rest  of  the  monarchy.  Who  will 
then  be  Hable  for  its  financial  equipment  ?  Will  it  be  the 
PoUsh  districts  themselves,  and  will  they  be  capable  of  it  ? 
Will  it  be  Austria  ?     Will  it  be  the  whole  monarchy  ? 


In  the  fundamental  law  of  1867  the  unity  of  Austro- 
Hungarian  economic  policy  is  declared  in  so  far  as  it 
relates  to  poUtico-commercial  representation  abroad,  and 
the  principle  of  equaUty  is  kept  in  view  with  regard  to 
tariffs,  indirect  taxes,  the  monetary  system  and  the  con- 
struction of  such  railways  as  affect  the  interests  of  both 
halves  of  the  Empire.  That  is  all !  There  is  no  joint 
economic  legislation,  no  department  corresponding  to  our 
Imperial  Department  for  Home  Affairs.  Hence  too  there 
is  no  joint  war  economic  system. 

This  division  of  the  economic  life  into  two  is  most  obvious 
in  regard  to  the  question  of  food-supply.  Austria  was 
approximately  in  the  position  of  Western  Germany  :  it 
needed  to  import  corn  ;  Hungary  was  and  is  the  fortunate 
possessor  of  a  surplus  of  corn.  To  an  ingenuous  mind 
nothing  seems  more  obvious  than  that  a  compensatory 
arrangement,  similar  to  that  which  exists  in  the  German 
Empire  between  districts  with  a  surplus  and  districts  with 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      171 

a  demand,  will  be  found  also  throughout  the  territory  of 
the  beUigerent  Danube  Monarchy.  But  deference  to  State 
rights  produced  a  different  position.  Without  being  sepa- 
rated from  Austria  by  tariff  barriers  Hungary  has  and  carries 
on  in  the  midst  of  the  war  its  own  poUcy  in  regard  to  com, 
its  own  maximum  prices,  its  own  railway  management,  and 
the  effect  is  indeed  almost  as  though  two  foreign  States  were 
negotiating  together.  This  situation  is  aggravated  by  the 
fact  that  any  possible  Roumanian  suppUes  can  only  reach 
Vienna  by  way  of  Hungary.  During  the  joint  war  Austria 
is  kept  in  sensible  dependence  upon  Hungary.  There  is  no 
object  in  moraUsing  about  this  ;  the  Hungarians  are  doubt- 
less right  in  theory,  they  insist  on  their  bond.  They  have 
always,  even  in  doubtful  cases,  advocated  a  special  Hungarian 
economic  State,  and  are  only  keeping  up  in  war  time  their 
conviction  and  custom  on  other  occasions.  But  the  economic 
union  in  war  time  is  not  a  part  of  the  Ausgleich  of  1867. 
People  are  shedding  their  blood  together  and  yet  the  corn 
prices  in  selling  Budapest  are  intentionally  higher  than  in 
purchasing  Vienna. 

Although  an  understanding  will  of  course  be  arrived  at 
ultimately,  there  still  remains  a  difficult  question  for  the 
future.  The  future  preparation  for  war,  of  which  we  have 
already  spoken,  rests  on  a  complete  co-operation  between 
military  affairs  and  the  national  economic  system,  and  hence 
the  suppositions  at  the  basis  of  the  Ausgleich  of  1867  must 
be  re-tested  in  the  light  of  military  preparedness.  Here  the 
triple  organisation  of  the  army  will  come  under  considera- 
tion, but  this  we  will  not  discuss  at  present.  The  underl5dng 
idea  in  1867  was  a  mihtary  partnership  with  economic 
separation,  a  conception  which  was  very  expUcable  at  that 
time,  but  which  in  this  war  has  already  led  to  all  kinds  of 
painful  complications,  and  which  will  prove  still  more  de- 
structive when  the  future  precautionary  war-storage  system 
is  introduced. 

It  may,  indeed,  be  admitted  as  certain  that  a  permanent 
defensive  and  trench-making  alliance  between  Germany 
and  Austria-Hungary  will  only  be  possible  on  the  basis  of 


172  CENTRAL  EUROPE 

a  system  of  war  storage  carried  out  by  both  sides.  I  do 
not  say  a  joint  storage  system,  because  that  is  desirable 
but  not  absolutely  necessary.  A  situation  can  easily  be 
conceived  in  which  two  aUied  States  keep  their  economic 
system  separate,  but  in  which,  with  mutual  rights  of  control, 
they  promise  and  agree  what  and  how  much  each  shall 
store  up  and  hold  in  readiness.  If  this  latter  provision  be 
neglected  it  will  be  impossible,  according  to  the  experiences 
of  this  war,  to  conclude  any  further  treaty  for  mutual 
defence  at  all.  The  possibilities  arising  during  the  war 
without  this  are  too  serious. 

Let  us  suppose  then  that  in  the  first  instance  Austria  and 
Hungary  make  the  system  of  corn  storage  a  subject  of 
negotiations  in  drawing  up  the  renewed  Ausgleich,  and 
then  together  come  to  an  arrangement  with  the  storage 
administration  of  the  German  Empire.  In  this  case  there 
are  various  conceivable  ways  of  satisfying  requirements. 
The  starting-point  of  the  discussions  in  question  might  be 
a  system  of  Austrian  State  corn  stores,  which  would  coUect 
the  necessary  suppHes.  After  the  expiration  of  the  existing 
commercial  treaty  there  is  nothing  connected  with  the 
rights  of  the  individual  States  to  prevent  Austria  from 
taking  up,  for  herself  alone,  the  State  purchase  of  corn,  and 
especially  since  Hungary  has  continually  insisted  on  the 
economic  independence  of  the  two  halves  of  the  Empire. 
The  system  of  Austrian  State  corn  stores  would  in  this  case 
carry  on  business  with  the  associated  corn  merchants  in 
Budapest  just  as  with  other  foreign  corn  firms,  whilst 
Hungary  would  simultaneously  make  sure  of  its  own  State 
stores  in  case  of  war,  not  a  difficult  matter  for  Hungary. 
This  position  of  affairs  would  be  a  direct  continuation  of 
the  procedure  adopted  during  the  war,  but  is  certainly  not 
without  difficulty  for  the  partnership  of  both  sections  in 
other  respects.  We  are  convinced  that  another  solution  of 
the  problem  will  be  discovered  according  to  which  Hungary 
will  occupy  that  central  position  in  the  business  of  providing 
com  for  Mid-Europe  which  corresponds  to  its  agricultiiral 
strength.    But  it  would  seem  like  interference  if  we  in 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      173 

Germany  tried  to  make  proposals  about  a  matter  which  is, 
in  the  first  instance,  the  home  concern  of  the  Danubian 
Monarchy,  however  closely  we  may  be  interested  in  the 
results  of  this  very  decision. 

****** 
Nor  can  the  remaining  war-storage  problems  be  quite 
decided  without  going  more  closely  into  the  problem  of  the 
Ausgleich  between  Austria  and  Hungary.  A  whole  number 
of  joint  economic  regulations  have  already  been  taken  in 
hand  up  to  the  present  in  virtue  of  the  common  tariff  and 
the  common  system  of  indirect  taxation.  Such,  for  example, 
is  the  State  treatment  of  breweries,  brandy  distilleries, 
mineral  oil  works,  sugar  factories,  patents  and  joint-stock 
companies.  In  Uke  manner  joint  superintendence  and 
administration  will  be  introduced  in  the  warehouses 
declared  necessary  for  the  purposes  of  the  new  system  of 
war  storage.  For  instance,  a  copper  monopoly  or  a  copper 
syndicate  under  State  influence  will  be  unavoidable  as  weU 
as  a  caoutchouc  and  rubber  syndicate  and  State  regulation 
of  the  stores  of  petroleum.  It  is  impossible  to  say  before- 
hand to  which  materials  this  method  of  treatment  will  be 
extended,  nor  do  we  wish  to  anticipate  here  the  possible 
work  of  a  future  Military  Economic  Commission.  We  wish 
merely  to  show,  and  to  indicate  the  reasons  thereof,  that  in 
Austria-Hungary,  just  as  with  us,  the  effect  of  the  war  is 
to  transform  the  economic  system.  Even  should  Austria- 
Hungary,  contrary  to  our  desires,  not  be  united  with  the 
German  Empire  in  permanent  prepsiredness  for  war,  the 
Danubian  Monarchy  must  still,  and  more  especially  indeed 
in  this  event,  in  view  of  its  risky  geographical  position, 
devote  the  utmost  care  to  plans  for  war  storage.  But  if, 
as  we  hope  and  suppose,  the  two  Central  European  Powers 
attain  to  a  permanent  pohtical  union,  joint  regulation  of 
the  storage  system  will  have  much  to  recommend  it, 
especially  for  those  materials  which  can  either  be  pro- 
duced more  extensively  or  further  worked  up  in  one  of  the 
two  Imperial  districts,  because  in  this  case  partnership  will 
ensure  a  wider  oversight  and  more  economy.    We  must  set 


174  CENTRAL  EUROPE 

up  a  Central  Eiuropean  War  Provision  Office  as  a  centre  from 
which  all  the  store  places  shall  be  estabUshed  and  filled, 
proposed  to  the  several  governments  and  parliaments  and 
inspected  as  to  their  contents.  Thus  the  beginning  of 
a  joint  economic  system  will  grow  up  almost  of  itself  and 
of  necessity,  out  of  the  joint  defensive  system.  This 
economic  partnership  is  not  voluntary  in  its  origin,  but 
is  forced  upon  us  by  our  history ;  it  is  no  theoretical 
academical  demand  but  is  a  practical  precept,  and  its  chief 
supporters  must  be  the  Ministers  of  War  on  both  sides. 


But  probably  the  further  development  of  the  financial 
question  in  Austria-Hungary  will  be  of  even  greater  import- 
ance for  the  future  interrelations  of  the  two  Empires  now 
aUied  in  the  war.  On  the  whole  the  condition  of  finance  in 
the  Danubian  Monarchy  during  the  war  has  been  better  than 
was  expected.  Our  general  statement  that  the  Austro- 
Hungarian  economic  system  had  sustained  the  war  remark- 
ably well,  appUes  especially  to  monetary  matters.  The 
loans  in  both  Austria  and  Hungary  have  aroused  surprise 
at  home  and  abroad,  and,  considering  the  conditions  of  Ufe, 
have  been  as  much  an  economic  victory  as  those  in  the 
German  Empire.  The  Dual  Monarchy  has  sufficient  capital 
and  also  procures  enough  milhards  for  pubhc  purposes  diiring 
the  war.  One  difference  consists  in  the  fact  that  as  a 
matter  of  course  the  system  of  a  gold  cover  was  less  strictly 
enforced  than  in  Germany,  and  that  hardly  any  gold  was  in 
the  hands  of  the  population,  for  Austria-Hungary  had 
previously  withdrawn  the  gold  from  circulation  or  had 
never  issued  it.  Consequently  the  reserve  was  necessarily 
smaller,  which  expressed  itself  in  a  sharp  fall  in  the  foreign 
exchange  value  of  the  bank-note.  We  also  have  had  our 
exchange  difficulties,  for  we  need  only  go  to  Switzerland  or 
Holland  to  find  out  at  once  that  a  German  hundred  mark 
note  is  no  longer  worth  the  same  as  before  the  war.  But 
in  the  judgment  of  all  the  experts  the  decline  in  the  value 
of  our  bank-flPte  is  only  temporary,  and  is  due  to  the  fact 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      175 

that  we  keep  back  our  gold  whilst  we  import  much  more 
from  abroad  than  we  export  thither,  so  that  a  stock  of 
German  treasury  notes  that  are  difficult  to  dispose  of 
collects  on  the  other  side  of  the  frontiers.  After  the  war  our 
renewed  exports  will  be  paid  for  with  them,  and  also  the 
interest,  which  will  again  be  payable,  on  foreign  securities. 
The  decline  in  Austrian  values  is  from  its  nature  more 
serious,  since  it  cannot  be  explained  merely  by  reason  of  a 
negative  balance  of  trade  due  to  one-sided  displacement, 
but  is  connected  with  the  question  of  a  gold  cover.  No 
exact  estimate  of  the  quantitative  relation  between  the 
cover  in  specie  and  the  note  issue  can  be  made,  and  hence 
all  these  matters  are  for  the  present  somewhat  obscure,  but 
the  disturbance  in  the  relative  values  of  the  paper  mark 
and  the  paper  krone  is  evidence  of  how  the  state  of  affairs 
is  conceived  of  in  banking  circles.  No  definite  and  per- 
manent standard  exists  between  the  Imperial  German 
paper  money  and  that  of  Austria-Hungary.  We  shall  have 
to  consider  this  point  in  our  investigation  into  the  future 
commercial  poUcy  of  Mid-Europe,  as  forming  a  serious 
obstacle  to  any  economic  partnership,  here  we  refer  to  it  in 
the  first  instance  as  an  Austro-Hungarian  economic  problem 
that  will  give  much  food  for  thought  to  the  Finance  Minister 
over  there. 

An  adverse  exchange  signifies  amongst  other  things  that 
more  must  be  paid  than  formerly  for  debts  to  foreign 
countries,  that  less  will  be  obtained  from  foreign  debtors  if 
they  have  to  pay  in  domestic  money,  that  imported  goods 
will  be  made  yet  dearer  owing  to  the  exchange,  in  addition 
to  other  general  causes,  that  foreign  loans  can  only  be 
raised  at  great  sacrifice.  AU  this  will  probably  make  the 
day  when  international  commerce  is  re-estabUshed  a  very 
critical  time  for  Austria-Hungary.  Not  that  the  weakness 
cannot  be  overcome,  but  it  will  not  pass  without  rapid  and 
energetic  financial  operations.  The  taxable  capacity  of  the 
Dual  Monarchy  must  immediately  be  called  upon  in  a 
marked  degree  if  a  period  of  congestion  is  to  be  surmounted. 
Austria  and  Hungary  must  make  good  the  lack  of  gold,  in 


176  CENTRAL  EUROPE 

so  far  as  such  a  lack  exists,  by  obvious  evidence  of  the 
solvency — based  on  the  products  of  taxation — of  the  State 
Treasury.  The  most  severe  economic  trial  will  not  be  felt 
until  then,  and  that  will  be  the  very  moment  when  people 
would  Uke  to  allow  those  who  are  returning  from  the  war  a 
comfortable  interval  in  which  to  make  themselves  at  home 
again. 

^  ^  ^  !if  Hf  Ht 

We  know  up  to  the  present  even  less  of  course  than  in 
the  case  of  the  German  Empire  what  forms  of  taxation  will 
be  selected  by  the  various  financial  bodies  in  the  Dual 
Monarchy.  Only  this  much  may  readily  be  pointed  out : 
that  Austria  and  Hungary  Uke  ourselves  will  be  in  no 
position  to  fight  shy  of  new  and  productive  State  enterprises 
or  State  regulated  syndicates.  There  is  an  instructive  Httle 
book  on  Osterreichs  Finanzen  und  der  Krieg  by  Hofrat 
Meisel  and  Professor  Spiethoff  (Dunckler  und  Humblot, 
1915),  in  which  is  calculated  in  a  most  interesting  way 
how  many  millions  could  be  saved  in  Austrian  finance,  if 
Government,  parties  and  nationahties  wished  to  economise. 
We  take  it  for  granted  that  the  most  vigorous  efforts  will 
be  made  in  this  direction,  but  nevertheless,  if  the  war  goes  on 
for  long,  there  will  be  a  big,  new  deficit  in  taxation  to  over- 
come. Taxes  on  luxuries  and  expenditure  will  certainly 
play  their  part  here,  but  they  will  not  suffice.  We  cannot 
judge  whether  or  no  further  types  of  direct  taxation  will  be 
considered.  Certainly,  however,  in  Austria  too  it  will 
finally  come  to  this  :  the  process  of  conversion  into  capital 
must  be  tapped  where  it  is  still  impersonal.  But  how  can 
this  be  done,  without,  as  in  the  Austro-Hungarian  taxation 
of  shares,  directly  checking  business  expansion  ?  Austria- 
Hungary  too  will  at  this  stage  find  syndicate  questions 
becoming  more  pressing  than,  on  purely  economic  grounds, 
they  are  at  present :  the  most  highly  concentrated  intensi- 
fication of  industry  with  a  view  to  solving  the  financial 
problems  of  the  State  ! 

Thus  we  arrive  again  at  the  position  already  reached  in 
the  previous  section :    the  transition  to  the  labour  tempo 


JOINT  PROBLEMS  IN  WAR  ECONOMICS      177 

and  labour  methods  of  the  German  Empire  appears  to  be  a 
condition  preliminary  to  surmounting  the  financial  burdens 
of  the  war.  After  the  war  we  shall  both  need  primarily  to 
economise  and  work  for  a  long  time  with  all  our  energies 
and  resources,  in  order  to  get  free  from  its  consequences. 
The  more  we  do  this  in  partnership  the  greater  will  be  our 
success.  We  Germans  of  the  Empire,  for  aU  the  sufiiciently 
adequate  reasons  cited,  must  desire  for  Austria-Hungary  the 
greatest  conceivable  vitaHty  and  good  management,  and 
must  do  everything  that  we  can  with  a  view  to  setting  our 
comrade  in  the  union  upon  a  stable  financial  footing.  If  the 
Austrians  and  Hungarians  wish  it,  if  they  desire  it  and 
demand  it,  the  German  financial  and  organising  power  must 
be  at  their  service.  We  say  if  they  wish  it,  because  success 
is  otherwise  not  conceivable.  An  economic  partnership 
accepted  unwillingly  and  suspiciously  is  pointless,  it  would 
only  prejudice  and  estrange  people.  Hence  the  energies  of. 
the  German  Empire  ought  not  to  make  the  offer  of  them- 
selves. That  would  only  arouse  or  increase  the  suspicion 
that  the  Germans  wished  to  get  through  the  period  of 
stagnation  after  the  war  by  means  of  the  Austro-Hungarian 
business,  until  such  time  as  international  commerce  was 
admissible  in  its  old  form.  This  suspicious  notion  is  possible 
and  indeed  exists  in  certain  quarters,  and  it  is  on  this 
account  that  I  repeat  that  those  of  us  who  are  striving  after 
an  honourable,  permanent,  economic  partnership  in  Mid- 
Europe  feel  no  pleasure  when  intrusive  advisers  and  specu- 
lators wish,  forsooth,  to  use  the  circumstances  of  the  union 
as  a  pretext  for  their  selfish  interests.  Endless  harm  may 
be  done  in  this  matter  by  those  who  cannot  act  tactfuUy 
and  with  foresight.  But  we  have  confidence  that  the  big 
Imperial  banking  houses  and  directors  of  syndicates  wiU 
grasp  the  seriousness  of  the  situation  and  will  understand 
what  is  at  stake.  No  oppression,  no  intrigue,  no  self- 
interested  exploitation  of  any  possibly  existent  weakness, 
but  a  frank  and  honest  readiness  to  answer  the  call  in  case 
it  sounds ! 

We  have  sat  together  in  the  economic  prison,  together 


178  CENTRAL  EUROPE 

we  will  break  the  chains  and  go  hand  in  hand  into  the  fresh 
air  again.  And  if  all  kinds  of  war  infirmities  still  cUng  to 
us,  we  shall  help  each  other  so  that  subsequently  even  a 
great  matter  will  not  trouble  us.  We  shall  aU  have  much 
to  do,  truly  very  much  !  Shall  we  do  it  together  or  shall 
each  one  act  for  himself  ? 


CHAPTER  VI 

OUR  POSITION  IN  THE  WORLD'S  ECONOMIC 
SYSTEM 

Even  if  Germany  and  Austria-Hungary  fuse  themselves  into 
an  economic  unity,  they  will  together  make  up  no  great 
structure  from  the  point  of  view  of  the  world's  economic 
system,  for  all  our  notions  about  great  and  small  have 
altered  more  during  the  war  than  in  the  whole  of  the  previous 
decade.  We  have  seen  the  giant  States  rising  up  to  crush 
us.  They  have  not  succeeded,  but  we  shall  not  forget  the 
moment  when  Russia  began  to  move  on  the  West  and 
when  Great  Britain  called  on  her  Indians  and  Canadians. 
The  future  wiU  be  even  more  concerned  with  phenomena  on 
this  grand  scale,  for  the  experiences  of  the  European  War  will 
be  studied  in  all  Government  Offices  all  over  the  world,  and 
every  Government,  even  as  far  as  East  Asia  and  Argentina, 
will  be  impregnated  with  new  conceptions  of  quantity.  It 
will  not  only  be  Central  Europe  that  will  emerge  from  the 
war  with  schemes  for  equipment  and  defence,  but  all  the 
other  States  as  well.  Even  a  growing  inclination  among 
the  people  towards  peace  can  do  little  to  alter  this  steady 
preparation  for  coming  wars,  for  the  historical  moment 
when  mankind  wiU  combine  into  one  single  immense  organi- 
sation is  still  far  distant.  Before  the  organisation  of 
humanity,  the  "  United  States  of  the  World,"  can  come 
into  existence,  there  will  probably  be  a  very  long  period 
during  which  groups  of  humanity,  reaching  beyond  the 
dimensions  of  a  nation,  will  struggle  to  direct  the  fates  of 
mankind  and  to  secure  the  product  of  its  labour.  Mid- 
Europe  comes  forward  as  one  such  group,  and  that  indeed  • 
a  small  one  :   vigorous  but  lean  ! 

179 


i8o  CENTRAL  EUROPE 

Sovereignty,  which  formerly  was  a  possession  widespread 
amongst  the  nations  of  the  earth,  concentrates  itself  more 
markedly  as  time  goes  on  at  quite  a  few  places.  There 
only  remain  a  limited  number  of  central  points  amongst 
mankind  where  government  is  really  exercised :  London, 
New  York,  Moscow  (or  Petersburg)  stand  firm.  It  is  still 
doubtful  whether  or  no  an  East  Asiatic  world-centre 
will  grow  up  in  Japan  or  China.  It  is  at  least  very  ques- 
tionable whether  or  no  India  or  Africa  will  ever  produce  such 
a  central  point  of  the  first  importance.  The  same  thing 
appHes  to  South  America.  The  future  significance  for 
mankind  of  any  East  Asiatic  and  South  American  centres 
that  may  possibly  arise  is  not,  however,  at  present  a  question 
of  practical  poUtics  for  general  history.  But,  on  the  other 
hand,  the  question  whether  or  no  a  separate  centre  in 
Mid-Europe  can  maintain  itself  between  Russia  and  England 
is  even  now  being  fought  out  with  all  the  energies  of  Europe 
and  with  endless  bloodshed.  The  human  group  Mid-Europe 
is  playing  for  its  position  in  the  world.  If  we  lose  the 
fight  we  shall  probably  be  condemned  for  ever  to  be  a 
satellite  nation.  If  we  are  half  victorious,  then  we  shaU  be 
obliged  to  fight  again  later.  If  we  win  a  lasting  victory  we 
shall  Hghten  the  task  for  our  children  and  grandchildren, 
for  then  Mid-Europe  will  be  entered  in  the  Domesday  Book 
of  the  coming  centuries. 

What  is  meant  by  a  satellite  nation  in  this  connection  ? 
We  might  also  say  a  planet  State.  Such  States  have  their 
own  hfe,  their  own  summer  and  winter,  their  culture,  their 
anxieties  and  their  splendour,  but  they  no  longer  follow  their 
own  laws  along  the  great  paths  of  universal  history,  but 
add  strength  to  the  guiding  group  to  which  they  belong. 
In  this  way  the  United  States  of  North  America  seek 
gradually  to  bind  to  themselves  all  types  of  States  in  North 
and  South  America,  not  in  order  to  absorb  them  but  in 
order  to  direct  them.  Russia  also,  though  in  very  different 
fashion,  is  drawing  all  the  nations  within  its  borders : 
Finns,  Poles,  Little  Russians,  the  Caucasian  races,  Armenians, 
Turkomans,  Tungusians,  etc.     So,  too.  Great  Britain  sur- 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM     i8i 

rounds  itself  with  Africanders,  Australians,  Indians,  Egyp- 
tians and  Portuguese,  and  now  during  the  war  is  even  trying 
to  include  the  two  Latin  nations,  France  and  Italy,  in  its 
rotation,  although  they  themselves  in  virtue  of  past  great- 
ness and  considerable  performances  would  gladly  still  count 
as  individual  centres. 

But  round  about  the  sateUite  States  there  stUl  exists  a 
certain  mass  of  unorganised  national  material,  which  has 
either  not  hitherto  desired  inclusion,  or  for  some  reason  or 
other  has  not  arrived  at  it ;  asteroids  or  comets,  which  for 
the  most  part  call  themselves  neutral  because  they  belong 
to  no  sun.  In  their  way  they  are  a  very  old  poUtical  family, 
much  older  than  the  conquering  super-national  syndicate 
States,  for  they  represent  the  old  small  middle  class  in  the 
family  of  nations.  But  at  some  time  or  other  each  of  them 
will  be  swept  away  into  the  sateUite  relationship,  for  it 
seems  impossible  that  an  ancient  small  Power  should  endure 
uninjured  through  the  centuries  in  the  midst  of  a  world  of 
concentrated  Great  Sovereignties  of  immense  bulk. 

AU  these  movements  towards  organisation  are  still  very 
much  in  process  of  becoming.  Practically  every  combina- 
tion may  reappear  as  loosened  once  more  or  as  hnked 
up  together  in  another  way.  And  in  fact  the  commercial 
age  which  has  called  forth  the  World-Powers  has  only 
been  actually  in  existence  for  a  couple  of  generations,  so 
that  its  effects  cannot  be  in  any  sense  yet  determined.  The 
period  of  groups  of  humanity  has  not  yet  arrived,  though  it 
is  already  at  the  door.  The  same  thing  apphes  to  them  on 
a  large  scale  as  appUes  to  industrial  syndicates  on  a  small 
scale  :  the  adhesions  are  still  changing  continually,  but  the 
principle  of  adhesion  itself  wiU  not  die  out.  Groups  of 
humanity  will  come  into  being  because  such  new  technical 
apparatus  as  steam-power  and  electricity  cannot  work  with 
State  formations  that  are  still  under  the  influence  of  earlier 
and  now  vanished  forms  of  international  intercourse.  What 
is  a  territory  of  half  a  million  square  kilometres  to-day  ? 
It  has  become  a  single  day's  journey. 


i82  CENTRAL  EUROPE 

But  before  we  discuss  the  Mid-European  group  of 
humanity,  we  shall  attempt  to  grasp  the  new  super-national 
structure  in  itself  with  somewhat  more  sociological  accuracy. 
We  shall  examine  then  the  three  great  organisms  that  are 
relatively  complete  :  Great  Britain,  America,  Russia.  Each 
of  these  is  more  potent  in  extent  and  in  mass  than  Mid- 
Europe  can  ever  be.  In  the  most  favourable  event,  so  far  as 
human  foresight  can  tell  to-day,  Mid-Europe  will  only  be 
the  fourth  World  State. 

Of  the  three  first  World  States  which  have  already  come 
into  being  during  the  preceding  period,  the  Russian  is  based 
mostly  on  coercion  and  the  American  on  free-will ;  England 
stands  between  the  two.  No  general  law  can  be  established 
as  to  whether  the  compulsory  or  the  voluntary  formation  is 
the  more  permanent  and  solid,  for  either  principle  appUed 
to  excess  will  break  up  the  State.  Every  super-national 
Great  State  is  a  work  of  art,  a  venture,  an  experiment  daily 
renewed.  It  is  like  a  great  machine  which  continually 
needs  repairs  somewhere  or  other  to  keep  it  in  working 
order.  And  as  every  work  of  art  is  determined  by  the 
artist  and  the  material  so  the  Great  State  grows  out  of  the 
leading  nation  and  the  nations  that  accompany  it,  out  of 
the  ideas  and  customs  of  the  rulers  and  the  quahties  of  the 
ruled,  out  of  the  ability  of  great  men  and  the  desires  of  the 
broad  masses,  out  of  history,  geography,  agriculture,  manual 
work  and  technique. 

The  psychical  character  of  the  Great  State  ought  never 
to  be  left  out  of  account  if  its  essence  is  to  be  grasped.  A 
bare,  mechanical  way  of  looking  at  it  is  absolutely  useless. 
The  greater  and  the  more  educated  and  the  more  exacting 
the  multitudes  to  be  governed  become,  the  more  elasticity 
is  required  in  their  management,  an  elasticity  which  must 
be  passed  on  as  inherited  wisdom  from  generation  to  genera- 
tion. The  proper  mixture  of  enforced  unity  and  permitted 
freedom  acts  magnetically  on  the  sateUite  portions.  But 
no  physical  or  organic  comparison  can  quite  express  the 
politically  formative  inner  condition,  yet  this  condition 
ipust  be  felt  in  retrospect  by  any  one  who  ponders  in  the 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM     183 

spirit  of  a  creator  over  a  fresh  great  formation  which  is  just 
coming  into  existence.  Very  many  instruments  must  be 
harmonised  together  in  the  super-national  Great  State,  so 
as  to  keep  in  unison  many  opposing  hiunan  elements.  This 
does  not  come  about  in  accordance  with  definite  formulae, 
and  written  laws  and  constitutions  too  are  only  a  very  inade- 
quate and  incomplete  expression  of  the  manifold  activity, 
in  which  daily  mistakes  must  be  surpassed  by  daily 
achievements. 

The  Russians,  with  all  their  crudity  of  nature,  possess  an 
undeniable  charm  which  attracts  half-civihsed  peoples  to 
them.  We  find  this  magnetic  power  of  the  Russian  spirit, 
a  power  hard  for  us  to  understand,  all  along  our  Eastern 
frontier,  amongst  all  the  peoples  intermediate  between 
Finland  and  the  Balkans,  all  of  whom  waver  in  their  senti- 
ments as  to  whether  or  no  they  do  not  prefer  the  unsys- 
tematised  Russian  in  his  natural  vigour,  to  the  German  who 
for  them  is  quite  too  rational  and  precise.  It  is  a  great 
mistake  to  explain  the  Russian  influence  as  entirely  due  to 
fear  of  the  knout.  Fear  does  form  a  part  of  the  Government 
machinery  of  this  group  of  peoples,  but  not  fear  alone. 
The  Russian  can  reaUy  govern  after  his  fashion,  and  possesses 
a  diplomacy  which  looks  back  on  a  long  series  of  successes. 
Here,  to  be  sure,  methods  are  often  employed  which  pre- 
suppose very  robust  consciences.  Gloves  are  worn  but 
they  have  holes  in  them.  What  we  despise  in  the  Russians 
is  what  partly  constitutes  their  vigour,  just  as  on  the  other 
hand  what  in  us  is  offensive  to  the  Russians  makes  up  a 
part  of  our  best  strength.  What  we  previously  termed 
elasticity,  with  the  Russians  takes  the  form  of  caprice,  an 
official  despotism  softened  by  comiptibihty  and  humours, 
very  comprehensible  to  populations  who  would  govern  in  just 
the  same  way  if  once  they  had  the  command.  Half  the 
Russian  corruption,  nay  a  quarter  or  a  tenth  of  it,  would  ruin 
our  State,  but  the  Russian  organism  can  stand  much,  very 
much,  as  the  war  shows.  Even  new  revolutionary  move- 
ments, should  they  appear,  as  is  very  possible,  will  indeed 
curb  the  Russian  strength  for  a  moment,  and  will  disturb  the 


i84  CENTRAL  EUROPE 

machinery  of  government,  but  according  to  all  historical 
experience  they  will  in  no  sense  mean  the  end,  for  they  too 
are  in  keeping  with  the  whole  character. 

How  differently  the  Englishman  administers  his  world  ! 
He  requests,  so  long  as  it  is  possible,  instead  of  commanding. 
His  sea  and  colonial  empire,  scattered  over  all  parts  of  the 
earth,  is  organised  quite  without  system,  just  as  the  history 
of  each  world  province  and  the  chance  process  of  its  acquisi- 
tion has  brought  it  about.  Hence  monarchical,  aristocratic 
and  democratic  contrivances  are  employed  according  to 
requirements  and  just  as  seems  serviceable,  as  a  ship  is 
constructed  according  to  requirements  out  of  iron,  wood, 
copper  and  canvas.  The  English  elasticity  consists  in  this  : 
that  what  we  call  principles,  it  regards  as  working  methods, 
an  instructive,  calm  adaptability  amongst  its  leading  men, 
combined  with  an  unshakable  self-confidence.  The  un- 
systematic character  of  English  Imperialism  has  often  been 
pointed  to  as  a  deficiency  by  theoretical  critics  among  the 
Germans,  and  people  believed  that  the  loosely  constructed 
building  would  break  in  pieces  by  reason  of  the  super- 
ficiahty  of  the  links  between  its  many  members.  But  the 
war  has  shown,  in  this  case  too,  that  loose  threads,  when 
they  are  properly  put  together,  can  hold  fast.  The  Empire, 
geographically  so  varied,  spread  out  on  every  coast,  has 
remained  a  unity.  There  may  be  shocks  in  India  or  Egypt, 
and  some  indications  suggest  that  these  will  not  be  altogether 
wanting.  But  a  flexible  administrative  skill  reacts  even 
on  the  entirely  foreign  races,  the  subjugated  masses  of 
the  Asiatic  and  African  territories,  and  always  successfully 
postpones  again  the  moment  of  danger. 

The  great  American  State  works  in  yet  another  way.  It 
is  the  most  non-mUitary  great  human  organism  that  has 
ever  existed.  A  business  State  in  virtue  of  a  detached 
geographical  position  and  a  popularly  intelligible  doctrine 
of  democratic  principles.  Its  strength  Ues  in  the  truly 
rational  division  of  competence  between  municipal,  county. 
State  and  Federal  governments.  The  concept  of  majority 
rule  prevails  everywhere  as  a  matter  of  course,  and  justifies 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM     185 

itself  as  State  machinery  on  the  whole  in  spite  of  all  the 
troublesome  accessories  which  must  be  taken  with  it  as 
part  of  the  bargain.  For  with  an  unconditional  principle 
of  majority  rule  the  formation  of  a  majority  becomes  a 
profitable  business,  and  thus,  according  to  our  feeUng, 
commerciahsm  enters  much  too  strongly  into  politics,  makes 
parties  into  business  undertakings  and  materialises  the 
finest  ideals.  But  the  American  can  hve  poUtically  even 
with  these  methods  of  his,  for,  as  we  have  already  said 
elsewhere,  he  has  the  voyage  across  the  ocean  behind  him, 
is  a  modern  utilitarian,  and  wants  above  all  neat,  trans- 
parent formulae.  He  is  essentially  lacking  in  political 
mysticism.  His  State  gods  too  are  excessively  human. 
He  will  have  no  mysterious,  moral,  joint  ego.  His  morality 
is  private,  not  political.  The  State  is  a  Clearing  House 
for  interests.  He  maintains  the  State  by  Umiting  the 
concept  of  State.  Thus  he  does  not  easily  arrive  at 
serious  internal  crises,  such  as  are  still  the  order  of  the  day 
in  South  America.  At  most  these  only  occur  over  presi- 
dential rivalries.  In  this  case  the  crisis  signifies  that  one 
cUque  of  business-politicians,  with  or  without  an  assertion  of 
principles,  has  been  thrust  out  by  another.  But  it  does  not 
indicate  that  the  State  itself  is  in  question,  for  if  it  broke 
up  to-day,  to-morrow  it  would  be  set  up  again  in  accordance 
with  exactly  the  same  simple  axioms. 

These  groups  of  humanity  are  thus  no  mere  administrative 
districts  of  a  homogeneous  human  society  developing 
according  to  like  rules.  On  the  contrary  the  super-national 
structures  possess  something  in  themselves  which  is  inter- 
mediate between  nation  and  humanity,  a  specific  essence 
which  cannot  be  taken  away  from  them  without  danger, 
because  it  is  just  this  that  forms  the  bond  of  union  between 
the  very  various  constituent  elements. 

****** 

Each  of  the  three  old  Great  States  is  intrinsically  inter- 
national. In  them  is  actually  expressed  as  much  of  the 
international  idea  as  can  be  realised  in  the  present  epoch. 

The  international  idea  was  in  the  first  instance  religious. 


i86  CENTRAL  EUROPE 

an  heirloom  of  the  Roman  Empire  surviving  in  Christianity. 
All  Christian  ideas,  in  so  far  as  they  are  not  hampered  by 
sectarianism,  are  directed  towards  mankind  as  a  whole  : 
"Go  ye  into  aU  the  world  and  preach  the  gospel  to  every 
creature  !  "  But  reUgious  unity  has  not  come  to  pass. 
The  Papacy  in  Rome  remains  as  the  incomplete  attempt  at 
a  spiritual  union  of  all  the  nations  on  the  earth.  Christ's 
kingdom  on  earth  is  a  concept,  a  prophecy  and  a  prayer, 
but  no  tangible  reality.  It  desired  to  organise  what  is 
noblest  and  highest  in  man  before  his  material  needs  could 
be  organised.  The  stupidity  of  dogmatism,  the  aspirations 
of  nations  not  satisfied  with  church  membership,  the 
geographical  separation  in  earlier  centuries,  the  human  nature 
displayed  even  in  the  management  of  the  superhuman,  all 
these  have  destroyed  Catholic  unity.  Christ's  kingdom  has 
become  a  plurality  of  creeds.  Only  a  prophetic  expectation 
makes  itself  heard  quite  softly  throughout  all  creeds,  that 
some  time,  in  the  wisdom  of  God,  and  by  different  methods 
and  fresh  energies  and  in  a  more  materialistic  sense,  a  road 
will  be  again  broken  through  to  that  goal  which  the  splendid 
efforts  of  so  many  apostles,  synods,  councils  and  bishops 
failed  to  reach. 

Next  the  international  idea  became  a  philosophical 
concept.  Almost  all  great  philosophers  are  in  some  degree 
cosmopoKtan.  And  under  their  inspiration  hterature  be- 
came impregnated  with  evidences,  small  and  great,  of  the 
longing  for  a  universal  civilisation,  which  reached  out  to  the 
goal  of  evolution  across  all  historical  narrownesses.  But 
when  national  struggles  became  serious  and  when  the  spirit 
of  nationaUty  was  awakened,  the  philosophers  and  men  of 
letters  for  the  most  part  took  their  stand  again  by  the  rank 
and  file  of  their  nation,  as  Fichte  and  Schleiermacher  did  in 
typical  fashion  with  us  Germans.  Philosophical  teaching, 
free  from  the  churches,  could  not  bring  about  what  the 
Church  had  failed  to  accompUsh.  Like  Christianity  it 
embodied  human  desires,  but  bare  abstract  thought  is  too 
delicate  and  too  weak  to  organise  mankind. 

Whilst,  however,  the  philosophical  teaching  of  humanity 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM     187 

was  still  at  the  height  of  its  influence  the  international  idea 
was  adopted  by  EngUsh  commerce  and  spread  over  the  rest 
of  the  world.  The  free  trade  concept  comprehended  man- 
kind in  realistic  fashion  as  an  immense  but  yet  ultimately 
Umited  and  calculable  multitude  of  working  faculties, 
buyers  and  sellers,  and  found  the  purpose  of  humanity 
in  the  business  of  exchange.  We  have  already  pointed 
out  that  the  EngHsh  always  regarded  themselves  as  the 
creators  and  supporters  of  this  internationaUsm,  a  fact 
which  is  bound  up  with  the  historical  characteristics  of 
this  commercial  type  of  cosmopoHtanism.  Moreover,  this 
tendency  contained  very  much  pure  international  ideaUsm 
along  with  its  utilitarian  theories  :  a  peaceful  Uberation  of 
the  nations  from  political  Hmitations,  the  repression  of 
possibiUties  of  strife,  the  raising  of  aU  through  aU.  The 
results  of  this  process  of  thought  have  become  quite  enormous 
in  virtue  of  the  machinery  of  exchange  which  set  it  going  and 
accompanies  it.  There  exists  to-day  in  fact  a  world  united 
in  the  economic  sense,  a  world  of  steamers,  railways,  letters 
and  telegrams,  a  world  of  sewing  machines,  grain  silos,  planta- 
tions and  warehouses.  International  commerce  and  divi- 
sion of  labour  are  estabhshed  amongst  the  nations.  All  this 
will  return  after  the  interruption  due  to  the  war,  but  not  in 
its  old  unbroken  and  unreserved  character.  The  war  has 
shown  that  exchange  alone  is  not  peace,  for  it  possesses  by 
itself  no  governing  and  controlling  strength,  no  force  to 
compel  peace.  The  old  well-estabUshed  mihtary  and  admini- 
strative States  Uve  on  within  a  world  of  international  ex- 
change and  struggle  with  all  the  means  at  their  disposal  over 
the  profits  and  the  supreme  control  of  the  world-machinery. 
Social  Democracy  took  over  the  concept  of  inter- 
nationalism from  middle-class  commercial  liberahsm  and 
deepened  it  essentially  in  that  it  sought  to  make  an  associa- 
tion of  mankind  for  production  out  of  an  association  of 
mankind  for  mere  exchange.  Since  it  is  primarily  and  in 
origin  a  proletarian  organisation,  social  democracy  possesses 
a  highly  developed  sense  of  organisation  in  general,  and  hence 
has  been  the  first  to  get  a  genuine  grasp  of  the  organising 


i88  CENTRAL  EUROPE 

character  of  the  social  epoch  which  is  now  dawning.  With 
bold,  dialectic  imagination  it  enlarged  its  experiences  of 
socialistic  organisation  to  fit  mankind,  and  conceived  as  its 
final  aim  an  administrative  State  which  should  include  all 
nations.  There  is  something  dreamlike  about  this,  but  a 
hundred  years  earUer  the  free  trade  ideal  was  also  imagina- 
tive in  much  the  same  way.  If  aU  nations  are  to  trade  with 
one  another,  the  conditions  of  hfe  of  the  workers  in  every  zone 
must  continually  grow  more  alike,  methods  of  work  must 
approximate  to  one  another,  goods  must  be  classified  and 
money  values  must  be  exchangeable,  average  requirements 
must  arise  and  a  housekeeping  scheme  for  mankind  belongs 
not  to  the  inconceivable  for  those  who  think  in  centuries. 
Even  to-day  we  have  a  world-corn-harvest  and  a  world- 
production  of  cotton,  a  world-coffee-market,  a  world-produc- 
tion of  iron,  a  world-demand  for  saltpetre  and  much  that  is 
similar.  Most  of  the  syndicates  that  have  arisen  locally  or 
been  promoted  by  a  State,  form  associations  reaching 
beyond  the  frontiers  of  the  country  and  endeavour  to  secure 
the  control  of  the  whole  of  their  department  of  production 
in  all  parts  of  the  world.  The  great  directors  of  the  economic 
system  have  long  since  ceased  to  think  in  terms  of  single 
States.  CapitaUsm  becomes  international  through  its  own 
impulse  towards  growth,  and  sociaUsm,  being  contained  in 
it,  follows  in  its  footsteps.  All  this  is  already  beginning  to 
be  actual  fact  and  will  persist.  But  the  war  has  broken 
through  this  socially  deepened  conception  of  internationalism, 
the  ideal  of  organisation  is  not  merely  economic,  is  not  only 
made  up  of  syndicates,  markets  and  trade  unions,  but  the 
basis  of  all  human  order  and  organisation,  of  all  law  and  of 
all  coercion  is  the  State.  And  the  State  does  not  make  the 
leap  across  from  national  State  and  territorial  State  to 
humanity,  for  it  is  no  creature  of  thought  but  an  organic 
reaUty,  which  grows  according  to  its  nature,  which  widens 
its  boundaries  and  which  5delds  nothing  that  it  has  earned 
or  established  unless  it  is  vanquished.  A  world-organisation 
without  poUtical  character  can  still  only  exist  in  the  sectional 
spheres  of  commerce  or  finance,  but  States  are  tenacious  and 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM     189 

fight  for  their  Hf e,  that  is  for  the  preservation  of  their  authority 
within  their  borders,  of  their  control  of  production,  of  their 
financial  strength,  and  now  also  of  their  storage  system. 
****** 
But  whilst   the   States   are   thus  fighting,   those   same 
central  points  of  which  we  speak  are  arising  and  extending 
their  power.     For  the  military  struggle  of  the  States  is  no 
game  which  is  continually  set  up  afresh  on  the  same  chess- 
board and  with  the  same  pieces.     The  demands  on  each 
combatant  State  increase  owing  to  military  technique,  the 
bulk  of  the  armies  and  the  height  of  the  war  expenses,  and 
any  State  that  cannot  keep  up  in  the  race  will  be  displaced 
to  the  third  or  fourth  rank  of  sovereignty.    A  stern,  inexor- 
able law  of  selection  rules  here.     How  many  States  have 
already  gone  imder  !     How  many  are  organised  into  federal 
States  or  State  confederations  !      The  foundation  of  the 
German   Empire  is   a  classical   example   of  the  politico- 
economic   process   of   enlargement.    This   development   is 
independent  of  all  our  individual  wills.     Even  those  who 
regard  it  with  horror  in  its  relation  to  personal  and  national 
culture  are  forced  to  recognise  it  as  fact.     There  are  grow- 
ing States  which  are  continually  driven  further  forward  by 
their  own  size.     In  them  is  reaUsed  a  side  of  intemationaUsm 
which  is  not  simple  commercial  exchange,  and  even  the 
exchange  of  goods  submits  itself  on  the  frontiers  to  the 
commands  and  claims  of  such  States.     Thus,  within  the 
world  of  exchange,  there  arise  great  State  or  super-State 
economic  provinces,  which  ultimately  begin  to  formulate 
their  economic  law  and  draw  up  their  demand  and  their 
scheme  of  management.     On  the  way  to  the  ultimate  world- 
economy  He  these  great  economic  States.    They  begin  by 
creating  a  regulation  of  labour  for  their  own  areas,  and  they 
deal  with  one  another  in  world-exchange  like  great  corporate 
businesses.    They  do  not,  it  is  true,  reaUse  the  dreams 
of  rehgion,  philosophy,  free  trade  and  sociaHsm,  but  they 
are  the  greatest   vision   of  himianity  that  is  attainable 
at  the  present  time.    Any  one  who  wishes  to  look  forward 
hopefully  to  the  far  distant  future  may  regard  them  as  the 


IQO  CENTRAL  EUROPE 

early  stages  of  the  final  organisation  of  mankind,  but  that 
is  his  private  affair.  They  themselves  wish  chiefly  to  live  as 
independent  existences  and  to  build  up  for  themselves  first 
their  Right  and  their  Might.  Whether  or  no  Central  Europe 
possesses  the  strength  within  itself  to  become  such  a  world- 
group  economic  body  *  on  a  political  basis,  is  our  problem. 
This  is  how  our  international  question  presents  itself. 
*  *  *  *  *  * 

It  is  in  no  sense  unpatriotic  to  answer  in  the  negative  the 
question  whether  Central  Europe  is  capable  of  becoming  a 
special  world-group  economic  organism,  for  if  it  is  to  turn 
out  later  that,  notwithstanding  all  our  goodwill,  we  lack  the 
material  preliminary  conditions,  or  the  spiritual  energies 
needed,  the  vain  attempt  will,  under  the  circumstances, 
mean  increased  difficulties  in  our  subsequent  position. 
At  present  there  still  exists  a  possibility,  even  after  this  war 
or  perhaps  on  account  of  it,  of  joining  either  the  EngHsh 
or  the  Russian  system  of  trade  and  sovereignty.  It  may 
seem  difficult  to  believe  this  whilst  the  guns  are  roaring  in 
East  and  West,  but  all  the  pubUc  and  private  talk  about  a 
separate  peace  either  with  Russia  or  England  impHes  at 
bottom,  if  the  matter  is  thought  out,  a  future  economic  or 
poUtical  imion  with  one  side  or  the  other,  for  after  a  war 
imposing  such  sacrifices,  peace  will  not  readily  be  concluded 
for  the  sake  of  a  mere  breathing-space  to  repair  weapons. 
After  this  war  each  nation  will  want  to  secure  a  permanent 
position  to  compensate  for  its  immense  sacrifice.  It  may 
be  that  circumstances  will  obHge  us  to  aUy  ourselves  with 
one  side,  it  may  be  that  one  or  other  of  our  opponents  will 
seek  an  interval  for  the  sake  of  self-preservation  and  that 
we  shall  grant  him  favourable  conditions  for  the  sake 
of  gaining  strength.     But  in  such  a  case  the  Mid-European 

*  Weltwirthschaftskorper.  This  and  other  similar  terms  must  be  read  in 
connection  with  the  phrase  "groups  of  humanity"  above.  There  are  to 
be  great  world-group  bodies  intermediate  between  Nations  and  Humanity. 
The  world  is  to  be  partitioned  between  these  bodies,  and  they  alone  will 
count  in  determining  its  future.  Hence  the  term  welt.  "  World-group  "  has 
been  used  for  welt  in  the  compounds  Weltwirthschaftskorper,  etc.,  since 
neither  "  world  "  nor  "  international "  is  unambiguous  in  this  connection. — 
Translator's  Notb. 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM     191 

idea,  according  to  the  position  of  the  matter,  will  be  either 
partially  adjourned  or  wholly  decided.  Let  us  then  look 
matters  frankly  in  the  face  and  acknowledge  to  ourselves 
and  to  others  what  may  happen  if  we  decide,  either  volun- 
tarily or  through  compulsion,  that  we  are  incapable  of 
creating  Mid-Europe. 

We  will  take  as  the  first  possibility  a  permanent  treaty 
with  Russia.  From  an  econonaic  point  of  view  this  offers 
dazzling  prospects,  for  it  opens  a  selling  market  of  the  first 
rank  to  our  industry,  since  the  French  milliards,  in  that 
case  lost,  have  during  the  last  two  decades  secured  the 
first  victory  over  Russian  economic  barbarism.  As  things 
are  to-day  the  Russian  and  German  economic  systems 
supplement  each  other  wonderfully  well.  By  a  system  of 
corn  storage  we  can  protect  our  agriculture  from  a  glut  in 
the  supply,  and  for  the  rest  we  can  make  Russia  the  chief 
source  of  our  food-stuffs  and  raw  material,  so  far  as  the 
character  of  the  country  and  the  stage  of  development  over 
there  admit  of  it.  Our  capital  will  then  quicken  the  further 
progress  of  Russian  agriculture  and  the  very  promising 
increase  in  mining,  trade  and  industry.  Looked  at  purely 
from  an  economic  standpoint  the  arrangement  is  the  most 
productive  of  all  for  us  if  it  is  permanent  in  character — 
but  only  if !  But  this  is  impossible  so  long  as  we  are  the 
opponents  of  Russia  in  Turkey,  in  the  Balkans  and  in  the 
Slav  districts  of  Austria-Hungary.  Herein  Ues  the  insur- 
mountable obstacle  placed  by  history.  In  such  a  case  we 
barter  our  independent  poUtical  futiire  for  a  temporarily 
great  economic  advantage,  for  through  this  alliance  our 
prosperity  will  indeed  develop  but  so  also  will  Russia's 
strength,  until  finally  Russia  will  shake  us  off,  because  she 
no  longer  needs  us.  We  shall  become  a  Western  nation 
dependent  on  the  Eastern  Power,  certainly  not  unconsidered, 
but  not  the  leader.  Bad  Russian  management  will  shelter 
behind  our  good  name,  and  our  technical  skill  and  our  capital 
will  improve  the  soil  on  which  millions  of  Russians  and  half- 
Russians  will  be  bom,  who  will  never  resemble  us  and  wiU 
never  trust  us.     We  shall  thus  act  as  engineer  to  promote 


192  CENTRAL  EUROPE 

the  military  and  economic  victory  of  the  Russian  World- 
Power.  A  great  nation  with  such  an  ascent  behind  it  as 
that  of  the  German  Empire  during  the  last  century,  cannot 
do  a  thing  of  this  sort.  Our  conceptions  of  civilisation  rise 
up  against  it,  and  our  hearts  will  never  be  wholly  in  the 
business.     Never  !     Better  small  and  soUtary  than  Russian  ! 

As  a  matter  of  sentiment,  and  that  in  spite  of  all  the  war 
"  songs  of  hate,"  it  is  easier  for  us  to  contemplate  a  per- 
manent union  with  the  English  World-Power.  In  this  case 
we  shall  become,  as  one  of  my  friends  puts  it,  the  junior 
partner  in  the  EngMsh  world-firm,  shcdl  supply  it  with 
confidential  agents  and  clerks,  build  ships  and  send  teachers 
to  the  colonies,  furnish  English  international  emporiums 
with  German  goods,  industriously  made  and  well  paid  for, 
speak  EngUsh  outside  our  own  four  walls,  enjoy  Enghsh 
internationahsm,  and  fight  the  future  English  battles 
against  Russia.  Our  navy  and  submarines  will  in  this  case 
no  longer  serve  any  specially  German  purpose,  for  who  else 
could  wish  to  dispute  Enghsh  sea-power  if  we  have  sub- 
mitted ourselves  to  it  ?  AH  this  would  be  regulated,  after 
the  Enghsh  fashion,  in  quite  reasonable  and  pleasant 
forms,  but  our  German  Imperial  history  would  have  become 
a  history  of  a  territory  as  is  to-day  that  of  Saxony  or 
Wiirttemberg.  A  great  nation  only  does  a  thing  like  this 
when  nothing  else  remains  to  it.  We  know  that  most  of 
the  nations  on  the  globe  have  no  choice  but  to  seek  such 
an  alliance,  on  one  side  or  another,  but  a  greater  aim  tempts 
us  in  virtue  of  our  strength  and  experience  :  to  become  a 
central  point  ourselves  ! 

To  many  Germans  to-day  this  dilemma  does  not  appear 
to  have  yet  presented  itself.  They  wish  to  become  neither 
Russian  nor  Enghsh  nor  even  responsible  for  a  new  world- 
group  economic  organism  intermediate  between  the  two. 
They  call  their  view  national  independence  and  self-suffi- 
ciency !  But  they  fail  to  appreciate  that  our  own  sphere  of 
existence  is  too  small  for  the  purpose.  That  "  small  and 
soUtary  "  which  we  have  ourselves  just  proclaimed  in  contrast 
to  the  possibility  of  a  Russian  alliance,  is  indeed,  as  we  must 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM    193 

now  assert,  in  no  sense  the  same  thing  as,  say,  when  Friedrich 
the  Great's  State  rejoiced  in  its  solitary  position  after  the 
Seven  Years  War.  In  the  interval  the  world's  economic 
system  has  become  so  much  more  narrow  and  everywhere  the 
principle  of  syndicates  and  of  exclusion  has  made  conditions 
very  different  from  what  they  were  in  the  individualistic 
atmosphere  of  the  early  beginnings  of  capitalism.  He  who 
is  alone  to-day  will  find  himself  outside  to-morrow.  In  such 
a  case  we  put  ourselves  in  the  position  of  industrial  enter- 
prises which  in  order  to  be  free  wish  to  remain  isolated 
from  the  combines  growing  up  around  them,  but  whose 
freedom  from  thenceforth  endures  only  in  a  state  of  con- 
tinual defence  against  boycott  and  combined  competition. 
Thus  ever3nvhere  we  are  met  by  the  tendency  of  the  de- 
veloping great  associated  bodies  to  round  off  their  sphere  of 
control.  The  better  regulated  the  world's  economic  system 
becomes  the  less  can  a  nation  of  only  seventy  millions  go  on 
its  own  economic  path  alone,  for  in  its  isolation  it  would  be 
overwhelmed  by  the  cries  :  England  for  the  English,  America 
for  the  Americans,  Russia  for  the  Russians  !  All  the  great 
bodies  endeavour  to  look  after  their  own  interests 
within  the  world's  system.  Even  Greater  Britain  wiU, 
if  we  remain  in  isolation,  surround  herself  with  tariffs 
and  systematically  make  it  more  difficult  for  us  to  share  in 
the  use  of  her  trading  and  coaUng  stations.  The  notion  of 
encircUng  and  starving  out  wiU  be  further  considered,  and 
calculations  will  be  made  as  to  how,  next  time,  we  can  be 
hit  more  sharply.  No  doubt  we  shall  always  be  able  to  sell 
the  products  of  our  labour  on  the  Enghsh-Russian- American 
world  markets  in  time  of  peace,  and  we  shall  be  in  a  position 
to  turn  our  miUtary  strength  to  good  account  between  the 
great  combatants,  as  is  the  fashion  of  neutrals.  But  we 
shall  be  powerless  against  the  further  rounding  off  of  the 
more  powerful  bodies,  against  their  tariff  poUcy,  com- 
mercial intrigues,  limitation  of  imports,  metal  monopoUes, 
cotton  trusts,  against  their  colonial  dominion  and  world- 
encircUng  poUcy.  We  shall,  it  is  true,  be  the  strongest  of 
the  small  nations,  and  hence  our  position  will  remain  better 


194  CENTRAL  EUROPE 

than  that  of  our  weaker  competitors,  but  the  idea  of  a 
purely  national  independence  offers  no  cheerful  prospect  to 
our  children  and  grandchildren  in  this  economic  age.  He 
who  does  not  grow,  decUnes.  As  once  the  Prussians  were 
forced  to  create  the  Customs  Union  in  order  not  to  remain 
small  and  sohtary,  so  must  we  keep  before  our  eyes  the 
Central  European  economic  world-group.  This  is  the 
meaning  of  our  history  whether  it  suits  us  or  not. 
****** 

So  long  then  as  the  sun  stiU  shines  on  us  it  must  be  our 
purpose  to  enter  the  first  class  of  the  economic  world-group 
Powers.  This  involves  the  adhesion  of  the  other  Central 
European  States  and  nations.  Except  to  our  comrades 
of  German  race  Uving  in  Austria  and  Hungary,  it  is  indeed 
of  no  special  direct  interest  to  these  peoples  that  we 
Germans  should  sit  in  the  upper  council  of  universal 
history.  It  is  not  to  be  expected  of  them  that  they 
should  share  our  historical  sentiments,  since  there  beats 
within  them  a  heart  of  another  race  and  of  different  stuff. 
They  will  put  the  question  to  themselves  from  their  own 
point  of  view :  whether,  in  the  choice  of  German,  Russian 
or  EngHsh  leadership,  they  wish  to  belong  to  the  German 
world-union  or  not.  Their  position  is  similar  to  what 
we  have  just  described  in  discussing  how  it  would  be 
with  us  if  we  were  to  join  the  Russian  or  Enghsh  union, 
only  with  this  difference,  that  the  smaller  nations  have 
not  the  possibihty  of  imagining  themselves  as  leaders 
of  economic  world-groups.  They  have  in  fact  only  to 
choose  between  isolation  and  adhesion,  and  for  them,  for 
the  reasons  adduced,  isolation  will  hardly  be  any  longer 
tolerable  by  the  end  of  another  generation.  Hence  sooner 
or  later  they  must  anyway  decide  with  which  union  they 
will  or  can  range  themselves,  according  to  geographical 
position,  production  and  mental  leanings.  This  is  a  harsh 
necessity,  a  heavy  fate,  but  it  is  the  overpowering  tendency 
of  the  age,  the  categorical  imperative  of  human  evolution. 
When  once  the  powerful  intermediate  forms  have  intro- 
duced themselves  between  territorial  and  national  States 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM     195 

on  the  one  hand  and  humanity  on  the  other,  struggles  and 
complaints  avail  nothing.  People  may  submit  to  necessity 
earlier  or  later,  freely  or  from  compulsion,  but  the  universal 
watchword  is  spoken  and  must  be  complied  with.  And 
those  who  conform  to  it  earher  will  in  general  secure  better 
conditions  for  the  futiure  than  those  who  let  themselves  be 
forced  and  pushed  beyond  the  historical  moment.  There  is 
no  need  whatever  to  proclaim  this  to  opponents  with  many 
words,  for  words  are  feeble  in  this  connection,  but  economic 
experiences  wiU  speak.  Small  States  which  cannot  carry 
through  any  tariff  war,  but  need  daily  imports  and  exports, 
must  in  future  be  registered  with  one  of  the  great  world- 
firms,  as  soon  as  the  super-firms  themselves  mutually 
separate  off  from  one  another  even  more  than  they  had  done 
before  the  war. 

****** 
If,  however,  the  foundation  of  the  Mid-European  union 
is  to  be  attempted  in  the  midst  of  this  human  evolution,  it 
must  be  admitted  as  a  matter  of  course  that  Mid-Europe 
will  be  no  such  natural  growth,  no  such  already  coagulating 
organism  as  the  three  great  unions  already  in  existence. 
The  Mid-European  structure  must  be  erected  with  judgment 
and  deUberation  from  stones  already  shaped  and  repeatedly 
used  in  building.  Unfortunately  it  did  not  grow  up  out  of 
the  old  instinct  for  power  before  the  period  when  mankind 
began  to  make  schemes  for  setting  its  house  in  order.  This 
constitutes  a  weakness  and  a  very  considerable  practical 
and  poUtico-technical  difficulty.  The  building  of  Mid- 
Europe  wiU  be  even  more  an  intellectual  achievement 
than  the  foundation  of  the  German  Empire,  but  it  will 
be  the  intellectual  achievement  of  that  nation  which  can 
say  of  itself  without  vanity  that  it  is  gifted  and  trained 
Hke  no  other  for  organising  an  economic  world-group 
of  this  nature.  We  refer  in  this  connection  to  the  exposi- 
tion that  we  have  given  earlier.  No  one  amongst  us 
or  amongst  our  neighbours  doubts  that  the  Germans  can 
accompUsh  the  economic  organisation  involved,  if  it  is  at 
all   humanly   possible.     But   it   is   a   somewhat   different 


196  CENTRAL  EUROPE 

question  whether  or  no  we  have,  in  addition  to  organisation 
and  technique,  that  indispensable  quaUty  for  world-union 
which  we  have  previously  termed  elasticity,  that  flexible 
skill  which  we  find  in  three  different  forms  amongst 
Russians,  English  and  Americans.  We  are  somewhat 
hard,  masterful,  taciturn,  have  but  Httle  patience  for 
our  slower  fellow-creatures,  and  demand  that  things  shall 
be  done  precisely  as  we  wish.  All  this  has  its  good  side, 
but  in  order  to  be  a  leading,  directing  economic  nation 
some  sort  of  international  oil  is  needed,  the  art,  the  great 
art  of  managing  men,  sympathy  with  others,  the  power  to 
enter  into  their  nature  and  aims.  Scientifically  we  can 
accomplish  the  thing  irreproachably.  In  retrospect  we  are 
the  most  sympathetic  of  all  nations,  but  practically  we 
have  not  seldom  been  small  schoolmasters  of  the  old  style 
or  non-commissioned  officers  with  pencil  and  mustachios. 
This  indeed  applies  least  of  all  to  our  leading  merchants, 
but  often  to  our  trade  secretaries,  directors,  officials.  The 
German  nation  as  a  whole  needs  first  to  grow  into  its 
new  task.  But  this  too  it  will  be  able  to  do  if  it  is  neces- 
sary. It  needs  only  to  be  put  plainly  to  us  in  the  first 
instance.  We  are  still  rather  too  young  as  a  world-group 
nation,  too  close  to  the  narrowness  of  the  old  provincial 
manners  and  the  habits  of  thought  of  small  nations,  not 
yet  free  enough  from  the  old  position  of  subjection  of  the 
pre-'48  period,  not  sufficiently  assured  in  intercourse,  and 
hence  often  rude  and  insolent  from  want  of  self-confidence. 
Respect  for  those  with  whom  we  wish  to  work  in  prosperity 
and  failure  is  not  yet  a  matter  of  course.  I  say  all  this 
openly  and  repeatedly  with  intention  because  herein  lie 
much  greater  hindrances  than  in  clauses  and  statutes.  Yet 
already  the  race  of  men  who  are  now  returning  home  from 
the  war,  and  the  race  of  women  who  have  in  the  meanwhile 
worked  like  men,  are  more  flexible  and  readier  for  great 
things.  We  all  wish  to  begin  anew,  and  so,  and  so  only,  not 
with  our  old  positiveness,  we  approach  our  neighbours  and 
ask  whether  or  no  they  will  enter  into  our  union. 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM     197 

Whom  must  and  can  we  invite  ? 

At  this  point  a  section  of  our  work  begins  over  which 
more  than  over  the  others  the  word  "  caution  "  should  be 
written,  for  we  are  stUl  Uving  in  the  midst  of  the  war,  must 
pubHsh  nothing  about  the  "  aims  of  the  war "  in  the 
narrower  sense  of  the  word  for  very  sufficient  reasons,  and 
cannot  count  everywhere  upon  a  friendly  interpretation 
of  our  statements  in  the  passionately  excited  war  conditions 
in  neighbouring  foreign  countries.  Then  rather  a  word  too 
httle  than  too  much  ! 

Even  now  there  are,  it  is  true,  in  Germany  as  elsewhere 
in  Europe  a  number  of  people  who  put  no  curb  on  their 
capricious  imagination  and  talk  as  though  the  government 
of  HoUand,  Scandinavia,  Roumania,  Bulgaria,  Greece  and 
the  Turkish  Empire  were  their  merely  secondary  duty  and 
they  needed  only  to  write  the  names  of  these  countries  on 
paper  in  order  to  receive  them  into  the  Central  European 
economic  world-group.  Yes,  there  are  daring  thinkers 
who  wish  at  the  same  time  to  attract  Switzerland,  France, 
Spain  and,  after  a  certain  purifying  interval,  even  Italy,  and 
so  found  the  United  States  of  Europe  with  or  without 
Belgium.  All  this  has  only  the  value  of  a  play  with  possi- 
bihties,  but  is  harmful  if  it  is  read  in  the  States  concerned, 
because  it  is  almost  always  conceived  from  a  one-sided 
German  standpoint,  and  does  not  take  into  consideration 
that  it  needs  at  least  two,  each  of  whom  has  his  own  interests 
and  anxieties,  to  conclude  a  treaty.  He  who  wants  too  much 
in  this  matter,  at  bottom  wants  nothing  at  all  except  to 
express  himself.  We  dissociate  ourselves  most  distinctly 
from  this  facile  and  superficial  treatment  of  the  problem, 
and  on  this  very  account  have  confined  ourselves  throughout 
our  work  up  to  the  present  to  the  discussion  of  the  union 
between  Germany  and  Austria-Hungary,  because  we  are  con- 
vinced that  the  two  Central  Powers  must  first  be  united 
before  any  application  to  a  more  distant  State  can  have  even 
the  smallest  prospect  of  success.  The  basal  forms  of  the 
new  treaties  and  arrangements  must  originate  between  the 
German  Empire  and  Austria  and  Hungary.     If  the  attempt 


igS  CENTRAL  EUROPE 

miscarries  here  then  other  States  need  not  be  troubled  at 
all.  If  it  succeeds  we  shall  know  what  we  can  offer  to  the 
others  concerned,  and  shaU  talk  to  them  with  concrete 
numbers  and  in  calculable  values.  Hence  it  is  also  a 
mistake  to  talk  of  a  German-Austrian-Hungarian  partner- 
ship only,  as  it  were,  in  passing,  as  an  auxihary  means  to 
Germano-Turkish  objects,  as  though  the  latter  were  the 
principal  thing  and  the  former  only  a  work  of  secondary 
importance  to  be  settled  anyhow.  All  this  will  be  carefuUy 
noted  in  Austria  and  Hungary  and  will  in  no  sense  increase 
the  desire  to  enter  into  serious  and  difficult  negotiations. 
The  Austrians  and  Hungarians  think  of  their  own  Balkan  and 
Turkish  interests,  which  mean  more  to  them  than  ours  can 
do,  and  are  surprised  that  we  Germans  should,  so  to  speak, 
carry  on  our  Turkish  poUcy  over  their  heads.  And  they  are 
right  in  this  !  They  know  that  all  German-Turkish  schemes 
are  nothing  but  water  without  Trieste  and  Fiume. 
*  ***** 

The  German-Austrian-Hungarian  economic  area,  as  now 
it  hes  before  us,  shut  off  by  the  war  from  the  rest  of  the 
world,  is  obviously  not  sufficient  for  an  economic  world- 
province,  for  it  is  far  too  much  of  an  area  for  the  import  of 
food-stuffs  and  raw  materials,  and  is  already  much  too  one- 
sidedly  directed  towards  industrial  exports  to  be  able  to 
support  itself  by  its  own  energy  and  without  further  addi- 
tions, even  in  the  principal  articles.  On  this  point,  as 
formerly,  we  refer  the  reader  to  the  statistical  section  of  this 
book.  A  vital  Mid-Europe  needs  agrarian  territories  on  its 
boundaries,  and  must  make  the  accession  easy  and  desirable 
to  them.  It  needs,  if  possible,  an  extension  of  its  northern 
and  southern  sea-coasts,  it  needs  its  share  in  oversea  colonial 
possessions.  But  how  can  aU  this  be  talked  of  now  without 
getting  involved  in  inconclusive  discussions  of  neutrality  or 
in  the  coming  negotiations  at  the  Peace  Congress  ? 

So  far  as  the  German  colonies  are  concerned  they  have 
held  out  weU  and  bravely  during  the  war,  and  in  doing  so 
have  everjrwhere  suppUed  valuable  proof  to  the  German 
Colonial   Government   that   we   are   not   so   incapable   of 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM    199 

colonisation  as  was  believed  in  some  places  both  at  home 
and  abroadi  Both  white  and  coloured  people  have  done 
their  duty,  so  far  as  we  know,  in  a  surprisingly  splendid 
manner.  The  whites  have  kept  up  the  defence  till  the  last 
man  and  till  the  last  possible  moment  and  the  natives  have, 
with  few  exceptions,  stood  by  them  faithfully.  Now, 
however,  we  are  cut  off  from  the  colonies.  Whether  and  to 
what  extent  and  in  what  condition  we  shall  get  them  back 
again  through  the  exchange  proceedings  when  peace  is 
made  no  one  yet  knows.  In  our  opinion  we  ought  not  at 
any  cost  to  allow  ourselves  to  be  deprived  of  colonial  activity, 
and  if  it  is  unavoidable  we  must  make  concessions  of 
occupied  land  in  Europe,  in  order  not  to  cease  to  be  a 
colonial  nation.  But  all  these  general  statements  show 
how  vague  our  future  economic  situation  in  the  world's 
economy  is  at  the  present  time. 

And  who  is  prepared  to  say  where  the  future  Central 
European  trench-made  boundaries  will  run  ?  Whether  they 
will  pass  on  the  inner  or  the  outer  side  of  Roumania,  or  on 
this  or  that  side  of  Bessarabia  ?  Whether  they  will  follow 
the  Vistula  or  not  ?  Whether  Bulgaria  is  to  be  included  in 
the  Central  European  sphere  of  interest  or  not  ?  Whether 
or  no  we  shall  secure  a  line  of  railway  to  Constantinople  in 
the  trusty  hands  of  aUies  ?  What  Mediterranean  seaports 
will  come  into  consideration  as  the  starting-point  of  Central 
European  railway  lines  ?  What  wiU  become  of  Antwerp  ? 
How  the  Baltic  Sea  will  appear  after  the  war  ?  Thus 
there  are  a  hundred  questions  which  will  stiU  remain  to  be 
answered.  So  much  only  is  clear  :  that  their  answers  will 
be  essentially  aifected  according  to  whether  the  German- 
Austrian  union  is,  at  bottom,  something  that  is  desired  and 
determined  upon  or  not.  Here  and  here  only  is  the 
birthplace  of  Mid-Europe. 

«  *  «  «  «  « 

But  let  us  suppose  for  once  that  a  beginning  has  been 
made  with  the  German- Austrian-Hungarian  union  and  that 
it  has  been  satisfactorily  steered  through  the  Peace  Congress, 
that  it  has  at  its  disposal  adequate  seaports  on  the  North 


200  CENTRAL  EUROPE 

Sea  and  the  Mediterranean,  and  that  northern  and  southern 
accessions  to  the  union  are  under  consideration.  Let  us 
suppose  further  that  Turkey  has  come  out  of  the  war  intact 
and  thus  with  a  behef  in  the  future,  and  that  there  devolves 
on  us  a  not  too  small  tropical  or  sub-tropical  colonial 
territory.  With  these  favourable  assumptions,  which  in 
themselves  contain  nothing  extravagant,  an  economic  State 
makes  its  appearance,  whose  statistical  position  each  may 
easily  reckon  out  for  himself  in  its  main  numerical  relations, 
but  which  we  shall  not  express  in  figures  for  reasons  already 
mentioned.  How  will  this  economic  State  be  able  to  main- 
tain itself  in  the  midst  of  the  world's  economic  system  ? 

Undoubtedly  it  is  much  stronger  than  Germany  alone 
or  Austria-Hungary  alone,  for  it  is  a  more  powerful  buyer 
and  seller  and  can  negotiate  in  a  different  way  with  foreign 
customs  unions  and  economic  bodies  than  is  possible  to 
a  separated  and  isolated  individual  State.  This  advantage 
exists  under  all  circumstances,  even  though  we  must  subse- 
quently assert  that  quantitative  possibilities  for  the  Mfe  and 
economic  development  of  Mid-Europe  remain  limited  even 
if  progress  be  favourable. 

Of  course  there  is  no  simple  method  of  estimating  the 
strength  of  such  a  union,  for  political  and  economic  energies 
will  in  general  not  allow  themselves  to  be  brought  to  a 
common  denominator.  Could  the  estimate  be  even  approxi- 
mately arrived  at  we  should  not  need  war  in  the  history 
of  the  world.  War  is  only  unavoidable  because  there  is 
no  recognised  measure  for  evaluating  the  claims  that  are 
put  forward.  If,  for  example,  Japan,  Russia,  England, 
America  and  other  States  dispute  over  the  extent  of 
their  influence  in  China,  there  is  no  recognised  procedure 
of  apportionment  according  to  which  their  mortgages 
on  China  can  be  measured.  The  actual  discovery  of  such 
a  procedure  would  be  pacifism.  The  Court  of  Arbitration, 
taken  by  itself,  is  only  a  proposal  for  a  machinery  of 
justice,  but  at  present  there  is  no  sketch  of  a  fundamental 
law  for  its  decisions.  Under  these  circumstances,  what 
remaiijs  but  to  put  it  to  the  test  of  blood  how  highly  each 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM    201 

one  who  makes  a  claim  is  in  a  position  to  value  it  ?  Thus 
in  all  future  international  affairs  Mid-Europe  too  will 
ultimately  be  referred  back  to  its  military  strength.  That 
this  is  very  great  the  war  has  given  satisfactory  proof. 
But  after  all  even  the  war  only  shows  that  Central  Europe 
has  been  able  to  hold  its  ground,  by  exerting  all  its  energies, 
under  existing  social  and  economic  conditions.  It  is  no 
guarantee  that,  in  a  later  stage  of  mankind's  development, 
just  the  same  trial  could  be  endured  again.  After  the  war 
people  will  set  to  work  afresh  to  build,  to  plant,  to  gather  in, 
to  dig,  to  forge,  to  weave,  to  water,  to  calculate  and  to 
save,  until  the  trial  must  once  again  be  made  whether  or 
no  the  new  organisation  has  been,  on  the  whole,  a  strengthen- 
ing and  an  advance. 

We  ask,  therefore,  whether  or  no  the  new  economic 
world-group  of  Mid-Europe  offers  prospects  of  growth 
according  to  human  foresight  and  in  so  far  as  we  are 
able  to  judge.  In  putting  this  question  the  wish  may 
easily  be  the  father  to  the  thought,  but  just  because  it  is 
easy  and  pleasant  to  paint  glowing  pictures  of  the  future, 
we  regard  it  as  our  duty  to  call  special  attention  at  the 
outset  to  the  difficulties  and  obscurities  of  the  matter 


We  will  begin  then  with  the  geographical  relations  of  size. 
What  is  the  area  of  Mid-Europe  ? 

To  any  one  who  journeys,  staff  in  hand,  from  the  Baltic 
to  the  Adriatic  Sea  the  country  lying  between  naturally 
appears  spacious,  varied,  broad  and  extensive.  But  he  who 
compares  it  with  the  available  areas  on  the  inhabited  earth 
must  perforce  call  it  very  small.  That  is  to  say,  if  we 
begin  to  reckon  in  miUions  of  square  kilometres  our  two 
home  countries  dwindle  to  quite  small  fractions  of  the  total 
available  area.  The  inhabited  surface  of  the  earth,  includ- 
ing the  deserts  but  not  the  polar  regions,  amounts  to  about 
132  miUions  of  square  kilometres.  This  amount  contains 
much  land  of  lesser  value,  out  of  which  no  meadows  or 
plantations  have  been  made  in  the  course  of  centuries,  but 


202  CENTRAL  EUROPE 

still :  the  housekeeping  area  of  the  world  with  its  hinter- 
lands and  waste  lands  is  of  this  size,  and  no  one  knows 
what  metals,  salts,  coal  and  power-sources  may  be  opened 
up  even  in  districts  that  are  now  unusable.  The  home 
countries  of  Germany,  Austria  and  Hungary  make  up  only 
1.2  million  of  this  132  miUion  square  kilometres,  that  is,  less 
than  I  per  cent.  !  By  adding  in  a  number  of  neighbouring 
European  States  we  can  make  it  up  to  about  2.5  miUion. 
Further,  if  we  claim  all  European  and  Asiatic  Turkey  our 
share  is  increased  to  about  6.7  miUion  by  taking  charge  of 
a  good  many  Arabs.  If  we  add  on  the  former  colonies  of 
the  German  Empire  we  may  register  about  9.3  million.  If 
we  venture  to  count  in,  to  a,  it  is  true,  somewhat  arbitrary 
extent,  the  overseas  possessions  of  neighbouring  States 
which  have  not  yet  joined  us,  it  is  possible  to  arrive  at 
about  13  miUion.  But  this  means  that,  by  a  very  favour- 
able calculation,  the  Mid-European  economic  body  wiU  be 
in  a  position,  in  some  more  distant  future,  to  control  one- 
tenth  of  the  available  amount  of  land.  Even  so,  this 
one-tenth  is  stiU  hardly  above  the  average  in  its  productive- 
ness. In  contrast  to  this  Great  Britain  alone,  with  Eg3^t, 
but  without  its  satellite  States,  possesses  34.4  miUion, 
Russia  23.7  miUion,  France  alone  11.4,  China  11. i,  the 
United  States  alone  without  other  American  States  9.4, 
Brazil  9  miUion  square  kilometres  ! 

Whether  we  with  our  tenth,  to  keep  to  this  assumption, 
can  supply  our  own  principal  needs,  can  fiU  our  own  store- 
houses and  keep  our  own  economic  system  going  even  by 
applying  aU  our  strength  and  technical  skiU  is  doubtful, 
at  least  with  the  increase  in  population  that  is  otherwise 
desirable.  Of  course  we  must  increase  our  own  agricultural 
production  very  much,  especiaUy  in  Hungary  and  perhaps 
in  the  neighbouring  States  that  join  us — this  we  shaU  do. 
Also  we  shaU  help  Turkey  to  irrigate  Mesopotamia  and  to 
induce  a  pleasant  fruitfulness  there,  but  the  dowry  of  land 
is  at  the  outset  somewhat  meagre  both  for  Germany  and 
Austria-Hungary. 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM    203 

How  do  things  stand  with  the  amount  of  population  ? 
This  question  too  can  only  be  answered  in  outline,  for 
there  is  a  very  great  difference  between  one  man  and  another, 
and  a  million  Central  Europeans  cannot  be  set  against  a 
million  Indians  or  Tartars.  But  all  the  same  the  population 
figures  give  something  to  go  by. 

The  population  of  the  German  Empire  and  of  Austria- 
Hungary  together  amounts  to  about  116  millions  according 
to  the  last  census  figures,  which  are  now  of  course  already 
exceeded.  Then  there  is  the  German  colonial  population 
of  perhaps  14  milhons  (various  estimates).  If  we  count  in 
with  these  25  miUions  of  European  and  Asiatic  Turks  and 
about  20  miUions  of  other  Europeans  with  perhaps  25  millions 
of  other  non-Europeans,  and  this  is  still  on  a  favourable 
assumption  which  we  should  not  like  to  put  higher  at  the 
outset,  the  population  of  the  Mid-European  economic 
world-group  would  be  roughly  reckoned  at  about  200  millions 
in  round  numbers,  that  is  about  one-eighth  of  the  present 
supposed  world-population.  We  need  not  point  out  again 
how  uncertain  all  estimates  of  this  kind  are  at  the  present 
time.  The  object  of  these  figures  is  only  to  give  a  quite 
general  view.  For  comparison  it  may  serve  to  note  that 
the  British  Empire  was  registered  some  years  ago  at  about 
425  miUions,  China  at  330  miUions,  Russia  at  170  miUions, 
the  United  States  107,  France  with  its  colonies  95. 

Our  Central  European  home  population  would  be  the 
centre  of  the  Ufe  of  an  economic  body  which  stretched  out 
its  grasp  into  other  quarters  of  the  globe.  It  possesses  an 
immense  capital  in  strength  if  it  does  not  stop  increasing. 
The  decline  in  the  birth-rate  which  began  before  the  war  must 
be  overcome  !  The  first  years  after  the  war  wiU  probably 
decide  whether  or  no  this  will  succeed.  After  the  war  we 
must  everywhere  begin  afresh,  and  in  this  respect  more  even 
than  in  anything  else.  Mid-Europe  needs  chUdren,  chUdren, 
chUdren  !  This  is  the  presupposition  of  all  prosperity  both 
miUtary  and  economic.  Now  that  the  war  has  shown  us 
obviously  in  France  how  helpless  and  in  need  of  help  a  nation 
becomes  that  has  lost  its  taste  for  growth  owing  to  insistent 


204  CENTRAL  EUROPE 

civilisation  and  to  immorality  ;  now  that  it  has  shown  us  in 
Russia  what  the  masses  signify,  even  with  only  a  Russian 
training  ;  now  that  we  have  lost  a  hundred  thousand  men  in 
the  war  ;  now  the  urgent,  heartfelt,  beseeching  call  must 
resound,  mingled  with  the  ringing  of  the  peace  bells,  calling 
to  men  and  women  in  town  and  country  :  beget  children  ! 
All  allowances  to  public  and  private  officials  must  estimate 
the  father  of  a  family  differently  from  the  mere  private 
spender.  The  storage  system  thus  accords  with  the  policy 
of  increasing  the  population,  a  highly  sacred  patriotic  task. 
This  is  no  party  question,  no  controversial  question,  it  is  a 
duty,  a  vital  command. 


Whereas  hitherto  we  have  on  principle  banished  the 
relevant  figures  to  the  statistical  portion  of  our  book,  an 
exception  has  been  made  in  the  discussion  of  area  and 
population  because  here  no  presentation  at  all  could  be  given 
without  numbers.  From  henceforth,  however,  we  shall 
return  to  the  earUer  practice,  since  otherwise  our  further 
exposition  would  be  too  difficult  reading,  and  since  all 
statistical  comparisons  between  the  economic  products  of 
world-group  States  can  only  be  drawn  with  very  many 
reservations.  If,  for  instance,  we  estabUsh  the  quantity 
of  wheat  produced  by  England  with  Scotland  and  Ireland, 
that  has  a  certain  importance  for  future  submarine  wars, 
but  has  only  a  small  value  for  world-economics.  If  we 
add  what  Canada,  India,  South  Africa  and  Austraha  pro- 
duce, the  picture  changes  enormously.  But  even  these  much 
larger  figures  are  not  useful  for  purposes  of  comparison 
since  rice  frequently  takes  the  place  of  wheat  in  the  British 
colonial  territories,  and  especially  in  India.  In  order  even 
to  arrive  at  a  judgment  concerning  the  strength  in  food- 
supply  of  a  world-group  Empire,  we  must  be  able  to 
express  in  figures  the  total  of  food-stuffs  produced  by  it, 
add  them  up  and  divide  them  per  head  of  the  popula- 
tion. But  how  can  this  be  done  when  both  adequate 
statistical  data  and  methods  of  computation  are  wanting 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM    205 

for  the  purpose  ?  The  attempt  at  computation  employed  in 
the  publication  Die  Deutsche  Volksernahrung  im  Krieg  by  the 
German  professors  who  inquired  into  food-suppUes  under 
the  direction  of  Professor  Eltzbacher  is  very  interesting, 
and  will  certainly  give  occasion  for  other  kindred  works. 
But  it  has  not  proved  of  immediate  value  to  us  in  the  war 
for  economic  schemes  of  national  housekeeping,  and  without 
further  investigation  no  one  can  transfer  the  method  used 
to  the  other  economic  States.  With  the  help  of  the  available 
international  surveys  and  the  statistical  abstracts  of  Germany 
and  Austria-Hungary,  I  have  done  my  best  to  compare  the 
Central  European  economic  area  with  the  Russian,  English 
and  North  American  areas.  I  have,  however,  only  succeeded 
in  placing  side  by  side  some  separate  series  of  figures  obtain- 
able from  the  statistical  abstracts,  so  that  the  reader  may 
work  them  out  further  as  he  pleases.  And  in  relation  to 
the  scheme  for  our  Central  European  economic  system  the 
further  possibilities  of  development  must  be  taken  into 
account  at  least  as  much  as  the  present  production.  But 
in  this  case  also  any  numerical  grasp  is  quite  unobtainable. 
In  addition  at  each  individual  point  we  are  met  with  the 
difficulty,  already  sufficiently  discussed,  that  no  statement 
can  be  made  beforehand  as  to  which  of  the  intermediate  and 
small  European  States  will  sooner  or  later  join  the  Central 
European  union.  Hence  we  must  unfortunately  be  content 
to  indicate  briefly  acknowledged  tendencies  and  tasks. 


The  English  world-group  Empire  is  the  first,  the 
oldest  and  the  most  powerful  economic  Power.  We  have 
discussed  above  its  administrative  methods,  now  we  must 
realise  the  abundance  of  its  wealth  in  land,  its  goods, 
powers,  productions,  plantations,  railways  and  ships,  its 
economic  material.  Here  the  Central  European  reader 
must  discard  from  the  outset  an  error  current  amongst  us, 
that  is  the  undervaluation  of  the  Enghsh  colonial  territory. 
Indeed  nowadays  these  are  often  no  longer  colonies  at  all 
but  Imperial  provinces,  and  after  the  war  they  will  secure 


2o6  CENTRAL  EUROPE 

a  yet  greater  share  in  the  Government  than  hitherto. 
Indeed,  one  of  the  facts  that  have  become  evident  in  the 
war  is  that  AustraUa,  South  Africa  and  Canada  are  EngUsh 
in  will  and  feeling.  They  have  their  own  provincial 
pride  and  their  inahenable  autonomy,  but  they  wish  to  be 
independent  parts  of  Greater  Britain.  After  the  war  they 
will  not  demand  separation  from  Great  Britain  but  an 
increasing  co-operation  in  the  management  of  the  Empire. 
The  old  Mother  Country  is  being  absorbed  in  the  whole 
organism  and  will  be  a  marketing  province  for  it  and  the 
centre  of  finance  and  industry,  but  will  no  longer  be  the 
seat  of  all  authority.  Expressed  in  economic  terms  this 
signifies  a  weakening  of  the  industrial  character  of  the 
Empire  for  the  benefit  of  the  most  powerful  raw  material 
community  in  the  world.  London  will  have  for  Greater 
Britain  something  of  the  value  which,  under  different 
conditions,  Petersburg  has  for  Russia — it  may  one  day  be 
temporarily  cut  off  without  the  English  Empire  as  a  whole 
being  vitally  injured  thereby.  The  more  the  immediate 
future  is  affected  by  submarine  policy  the  more  this  event 
will  be  accelerated.  But  this  means  that  the  industrial 
competition  between  Central  Europe  and  Great  Britain 
is  indeed  very  important  for  the  economic  character  of 
Greater  Britain  but  is  not  an  entirely  vital  question. 
This  war  is  still  carried  on  as  an  industrial  war  by  Great 
Britain,  but  it  is  becoming  apparent  in  the  course  of  it 
that  the  question  whether  Great  Britain  or  Germany 
have  the  lead  in  the  production  of  iron  is  by  no  means 
a  vital  one  for  Greater  Britain.  Its  factories  will  be 
removed  much  more  to  the  overseas  provinces,  in  so  far  as 
geographical  conditions  permit,  and  there  guns  will  be  fused 
and  machines  constructed.  Out  of  a  colonising  country 
will  develop  a  State  of  incomparable  self-sufficiency  as 
regards  agriculture  and  raw  material  and  with  its  own 
developing  industries.  This  State  wiU,  as  we  believe, 
gradually  set  on  one  side  the  old  EngUsh  trader  policy, 
will  more  and  more  leave  to  the  Parliament  in  London  only 
the  domestic  administration  of  Great  Britain,  and  will  set 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM J207 

up  a  Super-Government  with  economic  boundaries  such  as 
Joseph  Chamberlain  tried  to  introduce  more  than  a  decade 
ago.  The  watchword  of  the  World-Empire  will  be  economic 
independence,  but  at  the  same  time  the  repayment  of  war 
debts  will  provide  a  strong  inducement  to  the  estabhshment 
of  an  Imperial  war  chest  with  the  revenue  from  tariffs. 
Now  that  free  trade  internationalism  has  broken  down,  the 
EngUsh  genius  will  apply  itself  resolutely  to  a  Greater 
British  protectionism,  and,  from  the  economic  point  of 
view,  ever5rthing  is  ready  for  this  except  the  boundaries, 
for  this  Empire  Ijdng  scattered  on  every  ocean  is  assailable 
at  all  its  corners.  Its  trenches  lie  in  the  water.  Sea- 
militarism  I 


Greater  Britain  has  a  wellnigh  inexhaustible  basis  of 
arable  land  and  cattle  pasture,  more  indeed  than  the  United 
States  of  North  America.  It  possesses  forest  lands  in 
Canada  and  Central  Africa,  meadow  lands  in  AustraUa  and 
South  Africa,  herds  of  cattle  in  Canada  and  India,  cotton 
plantations  in  India  and  Egypt,  sugar  plantations  in  India, 
coal  in  Great  Britain  and  also  in  parts  of  India,  South 
Africa  and  Austraha.  It  lacks  coffee,  cocoa  and  iron-ore, 
but  instead  there  is  abundance  of  gold  in  Africa,  Australia 
and  also  in  India,  silver  in  Austraha  and  rubber  in  Africa. 
We  are  still  without  any  economic  work  which  treats  this 
whole  territory  as  a  unity  so  that  an  inventory  and  balance 
sheet  can  be  drawn  up.  Generally  we  can  see  only  the 
demand  of  the  mother-province  of  Great  Britain  and  cannot 
see  at  the  same  time  how  far  it  can  be  met  by  the  other 
provinces.  We  see  the  demand  of  the  European  Mother- 
Country  for  cotton  without  at  the  same  glance  surveying 
the  cotton  ports  of  India  and  Egypt.  The  same  is  true  of 
wheat  and  other  materials. 

All  exchange  within  Greater  Britain  is  naturally  accom- 
pUshed  by  water  routes  and  has  consequently,  as  already 
remarked,  an  insecurity  which  can  never  be  entirely 
removed.     But  what  man  can  do  to  estabhsh  an  adequate 


2o8  CENTRAL  EUROPE 

system  of  transport  that  England  has  done.  Her  merchant 
fleet,  in  comparison  with  the  merchant  fleets  of  Germany 
and  Austria-Hungary  together,  is  as  136  to  36.  The 
command  of  the  sea  is  not  only  a  claim  but  an  actual  fact. 
The  floating  multitude  of  England's  freight-carriers  stands 
far  above  the  means  of  intercourse  possessed  by  aU  the 
other  seafaring  Powers.  These  carriers  may  be  interrupted 
in  the  war  but  not  replaced,  not  dispensed  with. 

It  is  necessary  to  give  an  impression  of  these  quantitative 
relations,  because  there  are  too  many  worthy  Central 
Europeans  who  think  it  a  small  matter  to  make  the  building 
of  Greater  Britain  totter.  Certainly  Greater  Britain  suffers 
from  the  war ;  it  trembles  and  alters  and  shifts  its  internal 
formations,  but — after  the  war  it  will  still  be  there. 


Even  if  we  consider  the  United  States  of  North  America 
without  Mexico  and  without  South  America,  it  forms  an 
economic  Power  which  is  indeed  far  behind  Greater  Britain 
(with  India)  in  population,  but  is  full  of  unlimited  wealth 
in  land  and  of  possibihties.  The  decisive  point  here  is  the 
nature  of  the  population  :  there  are  nearly  88  per  cent,  of 
Europeans  or  their  descendants,  so  that  the  average  type 
of  human  being  is  fundamentally  above  the  average  in 
Greater  Britain  (always  including  India)  in  economic 
efficiency.  But  at  the  same  time  the  old  EngHsh  leadership 
is  much  weaker  than  in  Greater  Britain,  much  more  mixed 
with  inflowings  of  another  type.  The  displacement  of  the 
upper  class  in  the  country  is  indeed  one  of  the  most  serious 
problems,  perhaps  as  serious  for  the  United  States  as  ocean 
connections  are  for  Greater  Britain.  It  appears  from  a  sum- 
mary of  the  immigration  since  1821  that  a  greater  increase 
has  come  from  Germany  and  Austria-Hungary  than  from 
Great  Britain  and  Ireland,  but  this  increase  has  been 
worked  into  the  original  old  English  community.  Yet 
difficulties  are  increasing  now  that  Russians,  Austrian  and 
Hungarian  Slavs  and  Roumanians,  Italians  and  even  East 
Asiatics  crowd  in  far  more  than  do  EngUsh,  Germans,  Irish 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM    209 

and  Scandinavians.  This  may  not  be  very  dangerous 
politically  because  all  these  elements  immediately  take  their 
stand  on  the  footing  of  the  democratic  system  already 
briefly  described,  and  there  are  no  serious  problems  relating 
to  the  defence  of  the  country.  But  from  the  economic 
point  of  view  it  involves  a  certain  average  decUne  to  the 
proletarian  standard,  which  decline  is  perhaps  somewhat 
blunted  by  the  marvellous  swing  upwards  of  the  last  hundred 
years.  And  after  all,  the  foundation  of  material  advantages, 
success  and  will  power  is  so  strong  that  we  must  still  be 
prepared  for  new  manifestations  of  American  efficiency. 

And  whereas  Greater  Britain  is  engaged  in  shifting 
round  from  being  an  industrial  country  to  being  the  leading 
raw  material  Power  in  the  world,  North  America  is  obviously 
moving  in  the  opposite  direction.  It  is  adding  a  daily 
growing  industriaUsm  to  its  immense  production  of  raw 
material,  and  in  this  way  fulfils  all  the  necessary  presup- 
positions of  a  wealthy,  rising,  powerful,  world-group  economic 
area.  Railways  here  are  what  steamships  are  to  Greater 
Britain.  The  American  is  essentially  a  railway  man.  The 
area  employed  in  agriculture  here  is  nearly  as  great  as  the 
agricultural  area  in  European  Russia,  the  forest  area  is 
greater  than  the  Russian,  the  unused  land  is  still  extensive. 
The  North  American  wheat  area  is  in  proportion  to  the 
German-Austrian-Hungarian  as  203  to  68.  The  product 
per  acre  is  not  yet  as  high  as  our  average,  but  is  increasing. 
The  United  States  cattle  herds  are  only  surpassed  by  those 
in  India.  The  number  of  pigs  is  almost  twice  as  great  as 
in  the  central  States  of  Mid-Europe.  Above  all,  the  United 
States  is  the  leading  cotton  country  in  the  world,  far  ahead 
of  Greater  Britain,  producing  more  than  half  the  total 
world  harvest.  In  coal  the  United  States  equals  Germany 
and  Great  Britain  together.  Of  iron-ore  it  has  nearly  twice 
as  much  as  Germany.  The  profits  from  iron  exceed  the 
total  of  Great  Britain,  Germany  and  Austria-Hungary.  In 
gold  the  United  States  is  surpassed  only  by  South  Africa, 
in  silver  it  holds  the  first  place.  On  such  a  basis  the 
Americans  work  \vith  the  fearless,  good  sense  of  a  business- 

o 


210  CENTRAL  EUROPE 

like  and  indefatigable  nation,  and  understand  the  organisa- 
tion of  trades  and  syndicates  just  as  well  as  we  do.  Since, 
moreover,  they  are  not  really  injured  by  the  war,  but  on 
the  contrary  are  making  much  money  out  of  it,  they  will 
enter  upon  the  next  period  of  international  economics  in 
an  uncomfortably  healthy  condition  as  our  most  powerful 
competitors. 


And  how  do  matters  stand  with  Russia  ?  Just  now 
during  the  war  so  many  wise  things  are  said  about  Russia 
that  one  becomes  silent.  Even  those  to  whom  the  country 
is  not  unknown,  mostly  differ  in  their  opinions.  No  one 
knows  what  western  frontiers  Russia  will  have  after  the 
war.  But  this  much  is  certain,  that  Russia  has  shown 
more  military  and  organising  power  than  many  well- 
informed  people  expected.  People  talked  to  us  of  Russian 
corruption  as  though  it  were  an  absolute  impediment  to 
corporate  action.  But  that  is  not  the  case  :  a  big  elephant 
can  tolerate  many  insects.  What  we  cannot  form  an 
opinion  about  is  the  effect  of  the  war  on  the  Russian  nation. 
Perhaps  war  and  defeat  will  mean  a  beginning  of  far-reaching 
reforms,  which  wiU  have  something  of  the  effect  of  the 
reforms  of  Stein  and  Hardenberg  in  Prussia.  Perhaps ! 
But  in  any  case  there  will  remain  immense  quantities  of 
people  and  material.  Russia  has  the  best  increase  in 
population  in  the  world.  If  it  treats  its  people  wastefully, 
they  grow  again.  In  addition  it  has  forest  and  arable  land 
in  abundance.  Its  European  forest  land  is  in  proportion 
to  that  of  Germany- Austria-Hungary  as  i68  to  33.  Then, 
too,  there  are  the  Caucasian  and  Siberian  forests.  And 
forests  are  increasing  in  value,  as  we  have  already  said, 
in  world-economics.  Russia's  European  agricultural  area 
is  in  proportion  to  that  of  the  two  Central  European 
Powers  as  210  to  68.  Russia's  wheat  production  is  in 
proportion  to  that  of  Central  Europe  as  228  to  112,  but  the 
product  per  hectare  of  the  Russian  land  may  still  be 
immensely  increased.     The  number  of  cattle  and  sheep  is 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM    211 

great,  and  above  all  is  capable  of  increase.  In  beet  sugar 
Russia  comes  next  to  Germany  and  Austria-Hungary.  The 
number  of  its  cotton-spindles  is  less  than  that  in  Germany 
but  more  than  that  in  Austria-Hungary.  In  coal  it  ranks 
comparatively  low,  but  in  petroleum  it  stands  higher  than 
all  the  countries,  except  the  United  States,  together.  In 
iron-ore  it  surpasses  Austria-Hungary.  In  pig-iron  it  ranks 
only  a  little  below  France,  the  fifth  iron-power  in  the  world. 
Its  gold  cannot  be  compared  with  the  stores  of  Greater 
Britain  and  the  United  States  but  stands  much  the  highest 
in  Europe.  All  these  materials  wait  for  capital  and  labour. 
It  is  exceedingly  doubtful  how  things  will  look  with  Russian 
capital  after  the  war,  but  capital  will  come  from  somewhere 
or  other  so  soon  as  materials,  demand  and  labour  power 
are  present.  To  awaken,  in  the  economic  sense,  this  rich 
Russia  is  one  of  the  greatest  tasks  of  world-economics, 
much  more  tempting  than  even  the  induction  of  China  into 
the  capitaUst  system.  Notwithstanding  all  the  crises  and 
fluctuations  that  are  still  to  be  expected,  this  awakening  will 
sometime  succeed,  and  then  the  masses  of  the  Russian 
population  will  take  on  form  and  content.  When  this 
happens  we  need  to  be  already  well  ahead  in  Mid-Europe 
in  order  not  to  be  overpowered. 


The  object  of  these  three  scanty  surveys  is  only  to  supply 
the  right  proportions  for  Mid-Europe.  Many  of  us  are  still 
far  too  much  involved  in  small  conceptions,  and  fail  to 
appreciate  the  greatness  of  the  older  world-group  economic 
areas.  We  can  no  longer  work  up  to  the  quantitative 
measure  of  these  three  Empires,  at  least  not  in  the,  for  us, 
visible  future.  This  is  no  argument  against  the  foundation 
of  Mid-Europe  ;  but  a  strong  argument  for  accomplishing  it 
quickly  and  thoroughly.  If  we  wait  another  generation,  the 
neighbouring  nations  and  colonies  that  are  now  perhaps 
still  attainable  for  us,  will  be  lost.  For  the  Great  Powers 
will  work  onwards  and  will  follow  the  law  of  their  own 
weight. 


212  CENTRAL  EUROPE 

The  individual  producer,  great  estate  owner,  farmer, 
forest  owner,  manufacturer  or  mine-owner  asks  what  it 
matters  to  him  whether  he  tries  to  make  his  profit  in  a 
small  State  or  in  a  world-group  economic  Power,  and 
often  rephes  to  himself  that  he  would  rather  be  an  important 
man  in  small  surroundings  than  a  member  of  an  almost 
boundless  economic  union.  Moreover,  he  points  to  the 
Russian  producer,  who  has  to  put  up  with  severe  oppression 
in  spite  of  the  extent  of  his  markets.  This  latter  point  may 
be  readily  yielded,  and  it  may  be  acknowledged  that  a 
•smaller,  better  managed  State  has  advantages  over  a  larger 
one  badly  managed.  It  may  also  be  admitted  that  more 
effective  aid  is  often  given  by  the  Government  of  a  small 
State  than  by  that  of  a  great  Power,  since  all  Great  Powers 
have,  on  account  of  their  size,  something  of  a  free  trade 
character.  But  the  main  fact  remains  that  extensive 
markets  are  the  first  preUminary  condition  of  economic 
expansion  and  vigour.  So  long  as  the  agriculture  and 
industries  of  economic  smaU  States  Uke  Belgium  and 
Denmark  can  share  without  further  ceremony  in  the  EngUsh 
international  trade  system  without  at  the  same  time  making 
themselves  dependent  either  in  the  pohtical  or  economic 
sense,  the  industrial  producers  in  those  States  will  find  no 
occasion  to  think  other  than  provincially.  But  as  soon  as 
the  gates  of  Greater  Britain  are  closed  they  will  inquire 
very  quickly  and  minutely  where,  in  the  world's  economic 
system,  they  shall  and  can  find  shelter.  Individual  pro- 
ducers are  often  quite  unable  to  imagine  how  an  inter- 
national economic  displacement  will  work.  I  can  still 
remember  clearly  how,  when  I  was  a  child,  the  weavers  in 
Saxony  were  greatly  troubled  when  Alsatian  Miihlhausen 
was  taken  into  our  economic  union.  They  would  have 
preferred  to  remain  by  themselves  !  And  what  has  now 
become  of  all  these  anxieties  ?  We  know  nothing  more 
about  them.  It  will  be  the  same  when  Mid-Europe  has 
been  in  existence  for  a  generation. 

To-day  we  need  to  get  away  from  all  such  very  natural 
anxieties ;  we  must  do  so  if  we  do  not  wish  to  be  involved 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM    213 

for  all  future  time  in  economic  dependence  and  insignificance. 
No  farmer  or  manager  of  a  business  in  a  great  Empire  wishes 
to  desert  his  wider  sphere  and  go  back  to  the  old  limitations. 
Has  any  one  ever  heard  of  a  Hanoverian,  even  if  politically 
he  be  a  Guelph  from  head  to  foot,  has  any  one  ever  heard 
of  such  a  one  who  wishes  to  abandon  the  Prusso-German 
customs  and  economic  union  ?  There  is  no  such  person ! 
And  thus  later  no  Hungarian  and  no  Austrian  wiU  desire  to 
go  back  again,  if  only  the  connection  is  made  so  complete 
that  an  economic  world-group  really  comes  into  existence. 


And  if  now  we  are  willing  to  venture  on  the  founda- 
tion of  Mid-Europe,  let  us  examine  our  assets.  What 
do  we  possess  ?  In  our  investigations  so  far  we  have 
already  spoken  of  this.  We  have  a  country  which  is  small 
compared  with  the  countries  of  the  older  economic  Powers 
and  will  remain  small  even  if  it  is  increased  by  further 
adhesions  and  colonial  acquisitions.  But  we  use  our 
country  up  to  the  last  corner,  and  shaU  also  bring  into 
complete  and  inteUigent  use  the  land  which  to-day  is  only 
half  employed.  Our  forests  are  looked  after  in  rather  a 
different  fashion  from  those  in  Russia,  our  arable  lands  are 
grateful  and  responsive  to  industrious  cultivation.  Our 
herds  of  cattle  are  a  source  of  pride,  and  will  amply  win 
back  their  old  abundance  after  the  war.  Our  Central 
European  people  know  how  to  deal  with  nature  and  under- 
stand the  growth  of  plants  and  cattle  as  hardly  any  other 
does,  for  it  respects  natural  development  and  loves  the 
individuals.  Let  us  number  the  cattle  and  pigs  that  we 
own  between  the  North  Sea  and  the  Balkans  !  Look  at 
our  wheat !  Look  at  our  oats !  Look  at  our  fields  of 
potatoes,  at  our  sugar-beet !  These,  as  we  have  just 
experienced  during  the  war,  constitute  a  basis  of  life  which 
under  a  reasonable  system  of  storage  will  guard  our  joint 
territory  from  foreign  dependence !  And  then  go  into 
our  mining  districts  and  hear  there  the  daily  murmur 
and  rumble  of  work ;    look  at  the  ironworks  and  ports. 


214  CENTRAL  EUROPE 

Look  at  the  factories !  Notice  also  the  industry  of  the 
artisans,  the  activity  of  the  merchants,  the  abiUty  of  the 
legions  of  workers  !  We  do  not  want  to  overrate  ourselves 
and  our  powers,  and  we  wish  to  teach  our  children  still 
better  than  we  have  learnt  ourselves,  but  our  joint  popula- 
tion is  a  splendid  and  valuable  capital.  Even  in  a  hmited 
space  120  or  150  millions  of  such  people  are  a  power,  when 
rhythm  pervades  their  actions,  and  they  are  supported, 
sustained  and  spurred  on  by  organisation. 

It  is  true  that  we  lack  essential  material  unless  we  discover 
some  unexpectedly  great  colonial  supplement.  In  the  first 
place  we  lack  cotton,  then  wool,  then  corn  to  some  extent 
and  fodder  to  a  great  extent,  we  lack  copper,  iron-ore, 
leather,  coffee,  rice,  tobacco,  also  wood,  maize,  jute  fibre, 
petroleum,  chemical  materials  and  many  other  things.  We 
lack  more  than  Greater  Britain  and  North  America,  we 
have  fewer  quantitative  possibihties  than  Russia.  But 
there  exists  no  world-group  economic  area  quite  without 
supplementary  requirements,  and  we  can  make  and  lay  by 
in  our  storehouses  sufficient  to  save  us  from  anxiety  in  a 
serious  emergency.  A  population  that  possesses  such  stores 
of  coal,  such  machines,  and  can  work  as  ours  can,  can  also 
purchase,  save  and  economise. 

When  we  are  once  united  we  can  make  our  common 
economic  scheme  as  a  part  of  the  developing  world-group 
economic  scheme.  We  shaU  think  over  what  we  have, 
what  we  ourselves  produce,  what  we  must  buy  and  what 
we  can  sell ;  in  this  way  all  our  work  will  become  much  more 
definite  and  distinct.  We  shall  calculate  for  aU  of  us 
together.  In  this  matter  aU  economic  unions  of  producers, 
employees  and  workmen  will  help.  This  will  be  our  practical 
world-group  socialism. 


And  how  will  things  go  with  the  people  of  moderate  income 
in  our  Central  European  nations  ?  It  is  obvious  that  the 
great  and  strong  wiU  gain  when  their  sphere  is  enlarged.  But 
how  will  it  be  in  this  case  with  the  moderate-sized  under- 


OUR  POSITION  IN  THE  ECONOMIC  SYSTEM    215 

takings,  the  dependent  energies  ?  We  have  already  touched 
slightly  upon  this  question,  which  is  always  at  hand,  since 
a  nation's  future  is  not  merely  the  future  of  its  directors. 
But  here  we  must  once  more  indicate  two  fundamental  facts 
which  we  have  already  experienced  in  the  German  Empire, 
and  which  we  are  in  a  position  to  point  out  to  the  Austrians 
and  Hungarians  in  virtue  of  the  occurrences  in  our  own 
nation. 

We  have  found  that  with  the  growth  of  capitahsm  the 
small  independent  businesses  have  indeed  gone  through  a 
severe  crisis,  but  are  far  from  having  been  ruined  in  the 
mass,  as  had  often  been  prophesied  of  them.     There  are 
developing  and  dechning  manual  trades,  and  others  remain- 
ing level.     The  butchers  and  bakers  serve  as  an  example  of 
the  first  class,  Hnen  weavers  and  tanners  of  the  second, 
bricklayers,  shoemakers  and  indeed  also  tailors  of  the  third. 
In  the  small  trades  that  are  endangered  it  always  happens 
that  a  section  raises  itself  up,  whilst  another  and  larger  one 
decUnes,  but  the  decHne  is  generally  such  that  the  old 
people  drop  out  and,  frankly,  often  very  painfully,  whUst 
their  children  begin  from  the  outset  as  wage-earners.     But, 
on  the  whole,  the  great  bulk  of  the  small  trades  continue 
about  level,  they  do  not  grow  but  they  maintain  themselves, 
for  wherever  there  are  agricultural  or  industrial  profits,  a 
smaller  middle  class  of  auxihary  industries  grows  up  near 
the  chief  centres,  small  shopkeepers,  innkeepers,  clothiers, 
agents.     To  these  is  added  the  new  middle  class  of  Govern- 
ment, communal,  bank,  commercial  and  industrial  officials. 
These  all  make  their  hving  out  of  the  general  progress  of  the 
world's  economic  business.     When  work   and  business  is 
brisk  they  Uve  well.     For  them,  according  to  their  locality, 
the  prices  of  wood,   corn  and  cattle,   the  bank  balance, 
commercial  settlements,  salaries  and,  above  aU,  wages,  are 
the  indirect  bases  of  their  existence.     It  is  almost  impos- 
sible to  help  them  by  legislation,  even  if  people  wish  it 
ever  so  much,  they  can  better  help  themselves  mutually 
by    comradeship.     But    the    really    important    thing    for 
them  is  nothing,  nothing  else  at  all,  but  the  magnitude 


2i6  CENTRAL  EUROPE 

of  the  national  economic  business.  But  this  business  depends 
on  the  activities  of  the  world's  economic  system,  and  hence 
these  smaller  and  weaker  individuals,  too,  are  connected 
with  the  most  important  economic  questions.  A  Viennese 
member  of  the  House  of  Representatives  once  said  :  "If 
only  our  manual  workers  were  as  well  paid  as  those  in  the 
German  Empire  ;  that  is  all  they  wish  f or  !  "  But  this  and 
more  besides  they  will  never  attain  as  long  as  Austria  and 
Hungary  remain  in  isolation. 

And  we  have  further  found  that  with  a  growing  economic 
development  the  working  classes  everywhere  become  not 
only  very  much  more  numerous,  but  above  all  better 
nourished,  better  cared  for  and  better  paid.  Of  course 
many  very  important  and  well-warranted  desires  remain 
unsatisfied  and  will  be  brought  forward  by  the  trade  unions 
at  every  opportunity.  But  no  one  will  dispute  the  fact 
itself,  that  in  a  developing  economic  State  the  workpeople 
rise.  The  whole  of  our  modern  labour  system  would  be 
worthless  were  this  not  the  case.  I  have  heard  impressive 
accounts  by  Austrian  social  democrats  of  the  difficulties  and 
necessities  amidst  which  they  work.  They  too  use  the 
same  phrase  :  "  If  we  were  only  as  far  on  as  you  are  in 
Germany  !  "  In  the  pursuit  of  their  own  special  interests 
these  men  must  be  the  most  ardent  champions  of  Mid- 
Europe.  In  narrow  conditions  all  labour  movements  remain 
weak ;  they  can  protest  loudly  but  attain  httle.  But  so 
soon  as  the  horizon  widens,  the  area  of  passionate  ardour 
increases  and  the  wheels  revolve  a  thousandfold,  for  in  such 
a  case  even  the  members  of  the  proletariat  can  demand  their 
due  wages  for  work  necessary  to  the  world-group  system. 

The  concept  of  a  Central  European  economic  world- 
group  is  in  no  sense,  or  perhaps  only  in  the  first  instance, 
a  producers'  affair.  It  may  even  be  that  for  some  producers 
the  benefit  that  is  to  be  won  thereby  will  ultimately  vanish. 
No,  it  is  a  national  concern,  the  problem  of  the  masses : 
how  will  you  rise,  if  you  are  wiUing  to  remain  as  you 
are  ? 


CHAPTER  VII 

TARIFF  PROBLEMS 

No  part  of  the  Mid-European  economic  system  has 
hitherto  been  so  much  discussed  and  written  about  as  the 
customs  partnership  :  its  feasibility,  its  consequences,  and 
also  its  Hmitations  and  its  questionableness.  Military  part- 
nership, financial  partnership,  closer  approach  in  matters  of 
intercommunication,  law  and  administration,  associations  of 
syndicates  and  trade  unions,  have  only  been  spoken  of 
vaguely  and  in  whispers.  But  the  customs  or  commercial 
partnership  formed  the  subject  of  meetings,  schemes  and 
congresses  even  before  the  war,  and  has  continued  to  do  so 
during  the  war.  This  is  readily  to  be  understood  owing  to 
various  causes  presently  to  be  discussed,  only  people  must 
not  be  deceived  thereby  into  thinking  that  a  mere  customs 
and  commercial  partnership  by  itself  is  feasible  either  from 
the  Austrian,  the  Hungarian  or  the  German  standpoint. 
The  reasons  for  this  in  each  case  are  somewhat  various, 
and  we  shall  state  them  at  the  beginning  of  this  chapter  as 
introductory  to  its  main  subject-matter.  We  shall  speak 
then  in  the  first  instance  of  the  customs  partnership  quite 
generally  as  the  removal  of  frontier  tariffs,  and  shall  leave 
it  until  later  to  define  more  closely  the  possible  extent  of 
this  removal. 

Suppose  that  on  the  frontiers  between  Germany  and 
Austria  in  the  Tyrol,  in  the  Bavarian  forest,  on  the  ridge  of 
the  Bohmerwald,  on  the  Erzgebirge  and  on  the  Riesenge- 
birge,  the  customs  officers  were  removed,  or  that  only  a 
few  articles  were  left  to  them  to  control  and  on  which  to 
collect  money.     What  might  be  the  consequences  of  this 

for  the  Austrian  economic  system  ?     It  would  not  in  any 

217 


2i8  CENTRAL  EUROPE 

way  injure  Austrian  agriculture,  nor  the  really  big  indus- 
tries, which  already  have  their  place  in  international  markets, 
nor  would  it  at  all  disturb  the  home  market.  But  all 
those  businesses  that  only  subsist  because  the  people  in 
their  immediate  neighbourhood  order  and  buy  from  them 
for  local  or  national  reasons  would  receive  a  blow,  in  the 
form  of  a  new,  unusual  competition,  which  would,  it  is  true, 
have  to  bear  the  greater  costs  of  transport  and  distance,  but 
which  in  other  respects  would  work  under  more  favourable 
conditions.  This  latter  point  is  here  the  important  thing  : 
the  frontier  customs  officials  can  only  be  removed  if  the 
remaining  conditions  of  production  are  as  far  as  possible 
equaUsed  either  beforehand,  or  simultaneously,  or  at  least 
soon  afterwards.  Quite  equal  they  wiU  never  be  made,  and 
moreover,  as  we  have  already  remarked,  there  are  consider- 
able internal  differences  within  the  German  Empire  and 
within  every  economic  world-group.  But  a  certain  measure 
of  equality  is  under  all  circumstances  the  presupposition 
of  the  removal  of  frontier  barriers.  For  example,  if  it 
costs  more  for  a  North  Bohemian  manufacturer  to  procure 
cotton  than  it  does  for  a  Saxon  producer  in  the  same  industry, 
the  latter  will  gain  an  immediate  advantage  from  the 
removal  of  the  duty.  It  follows  that  the  pohcy  relating  to 
freights  and  railway  rates  must  go  hand  in  hand  with  the 
customs  partnership.  Or  if  a  joint-stock  company  in 
Austria  has  to  pay  many  more  taxes  than  in  Prussia,  then, 
when  barriers  are  removed  the  Austrian  company  wUl  if 
possible  remove  itself  to  Silesia.  Or  if,  owing  to  the 
diminished  value  of  the  Austrian  currency,  an  Austrian 
manufacturer  must  pay  more  in  kronen  for  his  half-finished 
goods  sent  from  Germany  than  his  competitor  in  the  German 
Empire  pays  in  marks,  it  will  be  difficult  for  him  to  sell  at 
the  same  price.  If  the  Austrian,  owing  to  a  certain  formalism 
in  his  Government  administration,  can  only  get  his  new 
engine-house  buUt  two  years  later  than  the  German,  this 
interval  is  sufficient  to  give  the  latter  the  advantage.  We 
might  go  on  talking  in  this  way  for  a  considerable  time  and 
the  outcome  of  it  all  is  :   the  customs  partnership  will  only 


TARIFF  PROBLEMS  219 

suit  the  Austrians  if  it  is  at  the  same  time  much  more  than 
a  customs  partnership  I 


The  same  thing  is  anyhow  broadly  true  for  Hungary  as 
well,  but  Hungarian  affairs  are  much  more  complicated  and 
demand  special  discusision.  We  shall  not  touch  upon  the 
matter  as  it  affects  State  rights  until  the  next  chapter,  here 
we  need  only  speak  of  the  interconnection  of  the  economic 
questions.  With  regard  to  this  point  we  call  to  mind  the 
account  in  a  previous  chapter  of  the  two  economic  States 
united  in  the  Dual  Monarchy,  and  the  section  relating  to  it 
in  the  statistical  portion  of  our  book.  The  question  is,  then, 
how  will  it  affect  Himgary  if  there  are  no  longer  customs 
of&cials  on  the  mountain  ridges  between  it  and  Germany. 
The  effect  would  be  the  same  as  on  Austria  if  Hungary  and 
Germany  were  bounded  directly  by  one  another  on  one  or 
two  important  routes  of  communication,  but  since  this  is 
not  the  case  the  Hungarians  will,  so  to  speak,  get  the  benefit 
of  the  customs  partnership  at  second  hand.  This  might  be 
somewhat  compensated  for  later  on  if  the  inclusion  of  the 
powerful  Balkan  countries  bordering  on  Hungary  came  into 
question.  But  in  the  meantime,  so  long  as  only  the  German 
Austrian-Hungarian  customs  relations  are  the  order  of  the 
day  Hungary  is  actually  dependent  on  the  goodwill  of  the 
Austrian  trafi&c  administration.  A  very  big,  profitable 
market  for  its  numerous  natural  productions  opens  out  to 
it,  but  in  between  is  another  economic  territory  that  also, 
of  course,  wishes  to  buy  and  sell  for  itself.  Consequently 
Hungary,  too,  is  not  helped  by  a  mere  commercial  partner- 
ship without  further  additional  clauses.  Like  Austria  it 
must  demand  a  closer  approach  in  legal  and  administrative 
matters.  But  besides  this  it  needs  a  guarantee  that  the 
raw  materials  and  half  or  wholly  manufactured  goods  which 
it  obtains  from  Germany  will  not  be  detained  on  the  way  or 
made  more  than  necessarily  costly,  and  hkewise  that  its  con- 
signments of  cattle,  fruit  vans,  grapes,  packets  of  vegetables 
and  butter  casks  will  reach  Berhn  as  quickly  as  possible. 


220  CENTRAL  EUROPE 

The  Hungarians  are  distrustful  in  this  matter,  and  hence 
would  gladly  go  a  step  further  and  demand  in  the  union  a 
return  to  the  earUer  conditions  of  a  special  intermediate 
customs  frontier  between  themselves  and  the  Austrians. 
We  shall  here  discuss  this  point,  but  only  in  relation  to 
economics,  deferring,  as  before,  the  question  of  its  bearing 
on  State  rights.  We  have  had  to  touch  on  similar  matters 
already  in  discussing  the  problems  of  war  economics.  The 
conception  of  a  specicd  Hungarian  economic  State  exists,  and 
will  possibly  be  reawakened  by  the  unavoidable  necessity  of 
discussing  the  Mid-European  commercial  partnership.  This 
must  not  surprise  us,  for  the  Hungarians,  it  may  perhaps 
be  remarked,  are  in  general  much  stronger  State  pohticians 
than  economic  politicians.  Their  poHtical  and  national 
energy  is  very  great  and  enforces  admiration  even  though  it 
may  be  exceedingly  inconvenient  to  the  rest  of  us  in  particular 
cases,  but  the  economic  ideal  is  less  worked  out,  otherwise 
economic  particularism  would  already  be  more  on  the 
decHne.  For  if  any  part  of  Central  Europe  is  certain  to 
gain  much  from  the  union,  it  is  Hungary.  We  have  already 
pointed  out  what  difficulties  it  must  get  into  if  it  were  left 
outside  the  German- Austrian  corn  trading  system.  In  this 
case  it  would  be  in  the  same  position  as  Roumania  and 
must  sell  its  corn  at  Roumanian  prices.  The  difference  in 
prices  between  Bucharest  and  Budapest  would  disappear, 
and  this  almost  entirely  to  the  disadvantage  of  Hungary. 
To  put  it  otherwise  :  the  economic  boundaries  of  the  corn 
trade  between  Vienna  and  Odessa  would  he  on  the  Leitha. 
The  same  is  true  in  some  measure  in  regard  to  cattle  and 
other  products  of  forest  and  field.  As  opposed  to  this  the 
interests  of  certain  Hungarian  textile  and  iron  manufactures 
and  similar  undertakings  in  a  protective  tariff  wiU  naturally 
be  relegated  to  the  background  from  the  Hungarian  stand- 
point. A  country  with  such  a  big  export  trade  in  raw 
materials  as  Hungary  cannot  really  seriously  contemplate 
an  isolated  economic  position  when  the  possibihty  of  inclusion 
in  a  country  with  a  corn  tariff  is  offered  to  it.  But  the 
presuppositions  are  :   partnership  in  traffic  communications, 


TARIFF  PROBLEMS  221 

partnership  in  tariff,  unimpeded  rights  of  economic  cirizenship 
in  the  big  common  union. 


Nor  can  the  German  Empire,  for  its  part,  admit  a  mere 
easing  of  customs  duties  without  another  and  more  extensive 
economic  partnership.  Formerly  we  had  an  economic 
treaty  with  Austria-Hungary  as  with  Russia  and  other 
States  with  tariffs.  After  the  war,  of  course,  this  can  be 
continued,  renewed,  and  altered  in  details  according  to  the 
wishes  of  both  sides.  But  in  this  case  so  soon  as  we  mean 
to  go  beyond  the  hmits  of  the  arrangements  and  to  grant 
specially  easy  conditions  to  the  Austrians  and  the  Hun- 
gsrians  the  difficulty  arises  that  we  cannot  simultaneously 
5deld  up  to  another  Power  the  advantages  which  we  grant 
to  the  Danubian  Monarchy.  We  render  all  our  remaining 
commercial  treaties  more  difficult  for  ourselves,  yet  without 
gaining  thereby  anything  substantial  for  our  economic 
future.  Moreover,  the  same  thing  also  applies  in  a  lesser 
degree  to  Austria-Hungary.  In  such  a  case  we  neither  of 
us  gain  the  advantages  of  the  enlargement  of  free  markets, 
and  we  hinder  ourselves  in  all  our  "  most  favoured  nation  " 
relations  in  regard  to  the  other  economic  world-groups. 

We  must  bear  in  mind  here  that  of  course  for  Austria- 
Hungary  the  trade  with  the  German  Empire  far  exceeds 
all  its  remaining  foreign  trade  (imports  for  home  con- 
sumption 39.5  per  cent.,  exports  of  domestic  produce 
40.8  per  cent.),  but  that  this  same  trade  is  of  much 
less  importance  in  the  foreign  commerce  of  the  German 
Empire  (imports  7.7  per  cent.,  exports  10.9  per  cent.). 
Hence  if  we  increase  our  exchange  with  Austria-Hun- 
gary, but  owing  to  this  make  our  exchange  with  other 
countries  more  difficult,  this  is  quite  a  diiferent  matter  for 
us  and  for  Austria-Hungary  respectively.  For  Austria- 
Hungary  the  German  trade  is  absolutely  the  primary  factor 
in  commercial  policy,  an  unconditional,  vital  necessity, 
whereas  for  us  the  trade  with  Austria-Hungary  holds  the 
second  place   indeed  in   exports,   but   only   the  fourth   in 


222  CENTRAL  EUROPE 

imports.  It  is  important  enough,  but  is  not  a  decisive 
factor  in  our  development.  It  must  be  readily  admitted  in 
this  connection  that  immediately  after  the  war  the  mutual 
connection  will  for  both  sides  come  more  strongly  into 
evidence  than  hitherto.  But  aU  the  same :  for  purely 
economic  reasons  Germany  will  not  be  able  to  enter  into 
any  one-sided  preferential  position  in  respect  to  Austria- 
Hungary  at  the  expense  of  its  relations  with  the  rest  of  the 
economic  world.  For  us  the  matter  appears  in  this  hght : 
either  Austria-Hungary  is  a  foreign  economic  State  Uke 
other  States,  in  which  case,  with  all  possible  consideration, 
it  will  yet  in  the  main  receive  equal  treatment ;  or  it  is  and 
will  remain  our  partner  in  the  union  and  our  comrade  for 
life  in  the  narrow  and  strict  meaning  of  the  words,  in  which 
case  aU  foreignness  vanishes  and  we  take  over  its  interests 
as  it  takes  over  ours.  In  this  case  we  shall  have  no  treaty, 
as  with  Russia,  France  or  the  United  States,  but  we  shaU 
be  or  shall  become  a  unity,  and  together  shall  confront  all  the 
world  in  buying  and  selling  and  in  all  treaties.  It  is  evident 
that  this  cannot  be  attained  aU  at  once,  but  even  now  our  first 
steps  must  depend  on  whether  we  desire  this  whole  or  not. 


Nevertheless  a  great  deal,  and  much  that  is  expert,  has 
already  been  said  and  written  in  connection  with  other 
general  Mid-European  economic  questions  about  this  very 
point  of  the  transaction  of  a  special  commercial  treaty. 
And  this  will  certainly  be  all  to  the  good,  for  the  intrinsic 
logic  of  the  matter  will  lead  of  itself  from  this  starting- 
point  to  further  developments.  The  choice  of  this  starting- 
point  for  the  discussions  has,  however,  a  special  cause 
in  present-day  facts  and  a  special  cause  in  history.  The 
former  cause  is  this  :  that  the  miUtary,  technical-finan- 
cial and  commercial  matters  connected  with  the  union, 
as  well  as  the  question  of  sjmdicates,  are  of  such  a 
specialised  technical  character  that  each  one  of  them  can 
only  be  really  surveyed  and  prepared  by  a  Hmited  number 
of   men;  whereas   tariff  negotiations,  on  the  other  hand. 


TARIFF  PROBLEMS  223 

have  always  been  the  subject  of  public  debates  and  have 
constantly  aroused  Hvely  interest  in  Parliament  and  in 
books.  Even  here,  it  is  true,  the  number  of  people  who  can 
really  attain  insight  and  an  intelligent  survey  is  not  great. 
But  the  general  fundamental  concepts  are  easUy  accessible, 
and  the  statistical  material  is  ready  at  hand.  Here  every 
figure  is  available  whilst  in  questions  relating  to  money  and 
syndicates  often  the  very  most  important  points  of  all 
remain  business  secrets.  Thus  it  is  not  merely  its  actual 
value  that  has  placed  this  point  above  all  the  other  matters 
to  be  discussed.  And  in  addition  there  is  the  historical  reason, 
that  the  remaining  schemes  for  combination  are  new  ideas 
which  have  only  just  arisen,  whilst  the  German-Austrian- 
Hungarian  customs  union  is  a  very  old  and  already  much  con- 
tested problem,  an  inheritance  from  the  previous  century. 

Professor  v.  Phihppovich,  the  most  distinguished  repre- 
sentative of  scientific  economic  doctrine  in  Austria,  in  his 
work,  Ein  Wirthschafts-und  Zollverhand  ^wischen  Deutschland 
und  Osterreich-Ungarn  (pubUshed  by  Hirzel,  1915),  has 
given  an  excellent  historical  account  of  the  earher  ideas  and 
schemes  about  commercial  poUcy.  Friedrich  List  here 
comes  to  the  fore  as  the  most  original  thinker  on  the  German 
side ;  List,  the  prophet  of  our  railways,  chambers  of  com- 
merce and  eastern  colonisation.  Brack,  the  Minister  of 
Commerce,  was  the  leader  of  Austrian  thought  in  this 
connection.  List  is  brought  conveniently  within  reach  of 
present-day  readers  in  the  edition  of  his  works  now  shortly 
to  be  brought  out  by  Geh.  Finanzrat  Losch  of  Stuttgart. 
And  Philippovich  gives  us  an  admirable  sketch  of  the  broad 
outlook  of  the  Austrian  statesman  who  was  Minister  of 
Commerce  in  1850  when  the  tariff  barriers  were  removed 
between  Austria  and  Hungary.  At  that  time  there  arose 
almost  simultaneously  from  South  Germany  and  Vienna  the 
demand  of  the  "  Greater  Germany  "  party  for  an  economic 
partnership  extending  from  the  Adriatic  to  the  North  and 
Baltic  Seas.  But  Prussia  refused  all  these  ideas,  for  in 
accordance  with  her  "  Lesser  Germany  "  policy,  she  wanted 
by  all  means  to  keep  Austria  from  any  share  in  the  admini- 


224  CENTRAL  EUROPE 

stration  of  the  Customs  Union.  The  economic  movements 
of  the  period  before  1866  cannot  be  understood  at  all  apart 
from  contemporary  pohtics,  for  they  form  a  part  of  the 
latter.  We  have  explained  in  an  earher  chapter  how 
essential  Bismarck's  founding  of  the  German  Empire  was 
for  the  whole  of  Central  Europe,  but  that  it  was  not  the 
final  settlement  of  the  Central  European  question.  With  a 
like  meaning  Phihppovich  remarks  of  Bruck's  plan  :  "  His- 
tory has  decided  otherwise,  but  has  not  buried  Bruck's 
conceptions."  Bismarck's  various  utterances  about  the 
impracticability  of  a  Customs  Union  date  from  this  period 
between  1852  and  1866,  and,  as  is  almost  always  the  case 
with  his  statements,  their  tone  of  uncompromising  rejec- 
tion is  to  be  explained  by  the  circumstances  of  contemporary 
history.  The  economist  Schaffie,  who  was  afterwards 
Austrian  Minister,  judged  the  matter  differently  :  "I  Uve 
more  than  ever  in  the  hope  that,  even  if  only  very  slowly, 
this  idea  will  attain  to  full  recognition." 

«****♦ 
Thus  people  in  Austria  are  faUing  back  upon  this  old 
Austrian  scheme,  which  was  at  that  time  fruitless,  whilst  in 
the  German  Empire  we  are  reminded  once  again  of  the 
former  Prusso-German  Customs  Union  because  it  points  the 
way  to  Central  European  unity.  In  those  days  the  German 
Empire  developed  out  of  the  Customs  Union,  and  in  Uke 
manner  a  newer  and  greater  State  association  may  form 
itself  out  of  a  present-day  customs  partnership  with  Austria- 
Hungary.  Truth  is  mingled  with  error  in  this  way  of 
looking  at  things.  The  error  consists  in  an  over-estima- 
tion of  the  pohtical  influence  of  mere  customs  unions  in 
general.  It  must  not  be  forgotten  that  the  Prussian 
Customs  Union  with  Hanover,  Bavaria  and  Wiirttemberg  did 
not  prevent  these  States  from  taking  up  arms  against  each 
other  in  1866.  It  is  true  that  the  Customs  Union  persisted, 
and  outlasted  the  war,  but  it  was  not  in  itself  strong  enough 
to  make  war  impossible.  The  same  thing  was  demonstrated 
in  1870  in  the  case  of  France,  which  had  an  excellent  tariff 
treaty  with  Prussia.     And  the  most  favoured  nation  clause 


TARIFF  PROBLEMS  225 

of  commercial  policy  which  Bismarck  inserted  in  the  Franco- 
German  peace  terms  ripened  into  no  poUtical  rapprochement. 
Tciriff  questions  had  no  such  strong  influence  then,  and 
have  even  less  of  it  to-day.  The  German  Imperial  union 
became  a  self-contained  poUtical  whole  only  because  its 
unity  stretched  far,  very  far  beyond  questions  of  tariffs  and 
commerce  and  was  reciprocally  miUtary,  legal,  financial  and 
industrial.  It  was  this  alone  that  made  an  economic 
organism  out  of  the  constituent  States.  Therefore  if  to-day 
we  wish  to  estabhsh  a  future  Mid-European  poUtical  unity, 
the  history  of  this  old  Prusso-German  Customs  Union  shows 
that  a  most  favoured  nation  arrangement  wiU  not  by  itself 
be  sufficient.  It  seems  to  be  the  most  convenient  step 
towards  the  great  object,  and  on  account  of  its  comparative 
faciUty  wiU  be  regarded  by  the  Government  departments 
concerned  in  the  question  as,  for  the  time  being,  the  best 
means  to  a  nearer  approach.  But  there  is  the  danger  that 
we  shall  then  beUeve  that  something  tangible  has  been 
attained  which  is  yet  not  the  case.  By  this  method  we 
shaU  arrive  at  greater  reciprocal  adaptation  of  imports  and 
exports,  but  also  at  a  permanent  atmosphere  of  continuous 
tariff  rivalries  and  mutual  agitations.  So  long  as  the  old 
Customs  Union  lasted  it  was,  it  is  true,  certainly  an  aid 
to  compromise,  but  the  feeUng  of  mutuaUy  belonging  to 
one  another  altogether  was  wanting.  Even  the  Customs 
ParUament  of  1867  to  1870  played  only  a  secondary  part. 
And  the  general  temperature  was  much  more  tuned  to  com- 
mercial poUcy  at  that  time  than  it  is  to-day,  for  it  was  the 
period  of  strengthening  beUef  in  free  trade.  The  removal  of 
tariffs  served  the  general  cause  of  progress.  These  matters  are 
not  so  simple,  however,  to  our  present  way  of  thinking. 


I  may  be  allowed  here  to  insert  a  personal  confession  in 
respect  to  the  tariff  question  as  a  whole,  because  I  have  to 
justify  co-operation  in  the  Central  European  customs  union 
to  myself  and  my  own  past  commercial  poUcy.  In  the  years 
.1901  to  1903  under  the  leadership  of  my  dead  friend  Theodor 


226  CENTRAL  EUROPE 

Barth,  of  ineffaceable  memory,  and  guided  by  my  honoured 
friend  Professor  Brentano,  I  shared  with  all  my  energies 
in  the  agitation  against  the  raising  of  the  German  customs 
tariff,   and  especially  in   the   opposition  to  higher   bread 
prices,    and   I    have   expressed   the   principles   underlying 
this  action  more  recently  still  in  my  Neudeutsche  Wirthschafts- 
poUtik  written  in  1905.     I  am  not  in  the  least  ashamed 
of  my  attitude  at  that  time,  because  it  entirely  corresponded 
to  my  convictions,  and  I  stiU  find  pleasure  in  retrospect 
over  the  vigorous  fight.     As  far  as  pure  theory  is  con- 
cerned  I   have   nothing  to  retract   from   the  views   then 
advocated,  for  I  am  still  of  the  opinion  that  our  economic 
system  in  the  German  Empire  and  our  material  preparedness 
for  war  would  have  been  somewhat  different,  but  no  weaker, 
if  the  older  system  had  been  continued.     But  in  the  interval 
the  world  has  gone  on  further  and  the  decisive  politico- 
economic   victory   of   the   German   protectionist   party   in 
December  1902  has  brought  about  conditions  in  the  German 
economic  system  which  cannot  be  ignored  even  by  those 
who  previously  opposed  the  new  movement.     The  position 
here  is  similar  to  that  in  all  important  poUtical  adjust- 
ments.    Some    Liberals    and    Social    Democrats,    to    take 
this  as  an  example,  were  at  the  time  prejudiced  for  different 
reasons  against  Old  Age  and  Sickness   Insurance,   partly 
on  principle  and  partly  on  account  of  its  piecemeal  achieve- 
ment.    But  when  it  was  once  in  existence  it  became  a 
constituent  part  of  our  Ufe,  and  though  it  might  be  reformed 
and  improved  it  could  not  be  cut  out  again.     Obviously  it 
is  now  very  difficult  for  those  who  opposed  it  at  the  time  to 
say,  after  the  event,  how  things  would  have  turned  out  if 
their  proposals  had  been  adopted.    The  conquered  has  no 
evidence,  even  if  much  suggests  that  he  was,  to  say  the 
least,   as  reasonable  and  well-disposed  as  the  conqueror. 
Thus,  in  brief,  I   maintain  that   the  increase  in  German 
agricultural  production  has  not  been  essentially  affected  by 
the  new  tariff  which  came  into  force  on  April  i,  1906,  but 
would,  on  the  whole,  have  gone  its  own  way  upwards  even 
if  the  old  Capri vi  duties  had  been  retained.     The  rise  in 


TARIFF  PROBLEMS  2«7 

price  was  very  desirable  in  the  individualistic  economic 
interests  of  those  concerned,  but  it  has  ushered  in  no 
new  epoch  from  the  standpoint  of  national  economics. 
There  has  been  a  certain  relatively  small  increase  in  the 
area  harvested,  but  the  product  per  hectare  has  kept  on  its 
previous  Une  which  was  already  rising  (with  variations 
according  to  the  year's  harvest).  The  same  is  true  of 
cattle-raising,  only  here  it  is  allowable  to  think  that  our 
stock  of  cattle  available  at  the  beginning  of  the  war  might 
have  been  still  greater  under  a  system  of  cheaper  fodder 
imports,  without  our  own  production  of  fodder  being  any 
less  in  consequence  than  it  is  at  present.  Comparison  with 
duty-free  agriculture  in  Switzerland,  Belgium,  Holland  and 
Denmark  shows  that  the  improvement  is  at  least  as  great 
in  the  duty-free  coimtries  as  in  those  with  protective  tariffs. 
When,  therefore,  at  the  present  day  the  agrarians  express 
the  opinion  that  the  economic  war  was  won  by  the  customs 
tariff  of  1902-3  and  by  the  treaty  tariff  which  came  into 
force  on  April  i,  1906,  I  for  my  part  regard  this  as  mis- 
chievous agitation,  and  oppose  it  in  the  interests  of  actual 
fact  and  of  truth.  Our  reasoning  in  1902  was  just  as  good 
as  that  of  our  opponents,  but  the  question  now  is  for  us 
whether  or  no  we  can  turn  back  to  the  old  starting-point 
of  1902  or,  indeed,  to  that  of  1881.  This  is  what  I  deny, 
at  least  for  the  period  which  we  are  now  in  a  position  in 
some  degree  to  survey.  For  by  reason  of  the  general  inter- 
national economic  movement  upwards  the  rise  in  tariffs 
and  in  the  prices  of  necessaries  has  been  compensated 
for  by  the  rising  wages,  salaries  and  prices  of  aU  goods 
to  a  much  greater  extent  than  we  and  our  opponents 
were  able  to  take  for  granted  beforehand.  Things  do  not 
turn  out  either  exactly  as  they  hoped  nor  yet  as  we  feared. 
They  had  to  find  by  experience  that  their  financial  gain  was 
absorbed  by  the  increase  in  their  private  and  pubUc  expendi- 
ture. We,  for  our  part,  found  or  could  have  found  that  the 
prophesied  lowering  of  the  standard  of  Hfe  among  the 
working  classes  did  not  make  its  appearance  because,  with 
the  co-operation   of  the  trade-union  organisations,  wages 


228  CENTRAL  EUROPE 

adapted  themselves  more  quickly  than  was  expected  to  the 
altered  conditions  of  prices.  All  prices  rose  :  real  estate, 
goods,  labour  power.  This  meant  a  burden  on  our  foreign 
trade,  but  no  noticeable  displacement  at  home.  Moreover, 
the  foreign  trade  could  bear  the  burden  because  the  amovmts 
demanded  on  the  international  market  increased  extra- 
ordinarily, and  also  because  elsewhere  a  simultaneous 
depreciation  in  the  value  of  money  set  in.  Owing  to  a 
combination  of  circumstances  and  to  rapid  adaptation  the 
whole  proceeding  was  of  much  less  importance  than  it 
should  have  been  according  to  the  predictions  of  both  sides. 
This  explains  what  I  said  above  :  that  tariff  questions 
were  of  more  importance  fifty  years  ago  than  at  present. 
But  it  also  explains  my  assertion  that  we  cannot  simply  turn 
back  to  the  earUer  state  of  things  because  for  a  long  time 
it  has  been  no  mere  question  of  forcing  back  certain  items 
in  the  tariff,  but  of  bending  back  all  prices  and  with  them 
the  value  of  money  within  Germany.  If  officials  and 
workers  are  asked  whether,  supposing  the  corn  prices  of 
1902  were  re-estabhshed,  they  would  be  wiUing  to  return 
also  to  the  salaries  and  wages  of  that  time  seeing  that 
the  principal  reason  for  the  rise  in  wages  would  be  obviated, 
they  find  this  notion,  to  say  the  least  of  it,  not  unques- 
tionable. It  is,  however,  certain  that  we  cannot  make 
such  an  experiment  at  the  moment,  amidst  the  uncertainty 
of  the  whole  economic  system  after  the  war,  when  anyhow 
there  is  prospect  of  a  further  reduction  in  the  value  of 
money.  At  present  we  must  work  on  further  on  the  founda- 
tion laid  against  our  will.  And  in  addition  there  is  a 
constant  parHamentary  majority  in  favour  of  the  existing 
tariff  system,  and  we  have  too  much  else  to  do  in  German 
pontics  during  these  next  years  to  begin  afresh  after  the 
war,  with  no  prospect  of  securing  a  majority,  a  theoretical 
tariff  dispute  between  the  existing  and  the  new  regulation 

of  trade. 

****** 

But  now  for  the  matter  itself !     What  comes  to  us  from 
Austria-Hungary,    and   vice   versa  ?     Of   course   we   shall 


TARIFF  PROBLEMS  229 

mention  only  the  big  items  and  refer  to  the  statistical  section 
of  our  book. 

The  idea  still  frequently  subsists  that  Austria-Hungary, 
the  "  agrarian  country,"  supplies  the  German  Empire  with 
much  corn  and  other  agricultural  products.  The  reader 
who  h£Ls  followed  our  previous  exposition  knows  already  that 
this  is  not  the  case,  especially  during  recent  years.  Rye 
is  sent,  according  to  the  yearly  harvest,  by  us  to  them,  and 
wheat-flour,  of  rather  higher  value,  by  them  to  us,  but  this 
is  no  great  matter  whilst  the  product  per  hectare  in  Hungary 
stands  at  its  present  level.  Of  much  greater  importance  are 
malt-barley,  malt  and  hops  for  our  beer  breweries.  Potatoes 
are  only  exchanged  in  certain  districts.  Fruit  of  all  kinds 
comes  to  us  from  over  there  in  not  inconsiderable  quantities. 
The  importation  of  wood  from  Austria-Hungary  is  of  very 
much  more  importance,  because  wood,  generally  speaking, 
is  a  vital  factor  in  the  Danubian  Monarchy  :  timber,  planks, 
wood  pulp,  mine  timber,  wood  alcohol.  The  imports  of 
cattle  and  cattle  products  are  exceedingly  numerous  :  eggs, 
oxen,  horses,  cows,  geese,  chickens,  goats,  milk,  butter,  bed- 
feathers,  calves'  skins,  sheepskins.  Other  hides,  skins  and 
furs  are  exchanged  so  that  certain  quaUties  go  in  one  direc- 
tion and  others  in  the  other.  The  mutual  relations  in 
regard  to  wool  are  fairly  complex,  for  a  part  of  the  overseas 
wool  reaches  Austria-Hungary  through  German  hands. 
Manufactured  woollens  go  as  half-finished  goods  more  from 
Germany  to  Austria-Hungary  than  vice  versa.  Linen  yarn 
comes  from  Austria-Hungary  to  us.  Cotton  waste  is 
exchanged,  cotton  yam  has  recently  been  imported  in 
larger  quantities  to  Germany  (perhaps  temporarily).  In 
coal  and  coal  products  the  German  importation  into  Austria- 
Hungary  is  very  great,  whereas  in  hgnite  Austria  surpasses 
us.  Books  are  exported  more  from  Germany  than  vice 
versa.  Purely  industrial  goods  pass  quite  preponderatingly 
from  Germany  to  Austria-Hungary  :  tubes,  stoves,  machines 
of  all  kinds,  motors,  ships,  electrical  apphances,  chemicals, 
leather  goods,  clothing  materials,  etc.  The  springs  gush  out 
from  both  sides,  flow  hither  and  thither  and  are  worked  up 


230  CENTRAL  EUROPE 

a  thousandfold  in  opposition  to  one  another  and  on  behalf 
of  one  another.  All  this  is  a  daily  changing,  revolving  life 
and  cannot  be  expressed  at  aU  in  a  few  general  formulae. 
It  must  be  followed  bit  by  bit  with  the  help  of  the  statistical 
tables.  But  then  we  find  that  all  relations  anyhow  possible 
in  our  mutual  economic  relationship  are  actually  to  be  met 
with  somewhere  or  other.  Austria-Hungary  is  a  raw  material 
country  to  us,  but  yet  not  so  much  so  as  to  be  for  us  a  raw 
material  country  as  such.  It  is  the  exchange  country  for 
specialities  which  exist  either  here  or  there  in  great  quantities 
or  excellent  qualities.  It  is  the  receiving  country  for  our 
industries,  but  not  in  the  sense  that  it  has  not  similar 
industries  of  its  own,  or  tries  to  promote  them.  As  a  whole 
the  position  is  more  like  the  relation  between  two  brothers 
than  that  between  man  and  wife  ;  competition  between 
brothers,  which  is  best  settled  by  their  both  taking  a  share 
in  the  business. 


Geh.  Finanzrat  Losch  of  Stuttgart,  in  his  work,  Der  Mittel- 
Europdische  Wirtschaftsblock,  attempted  to  mark  out  three 
principal  groups  from  the  multitude  of  cases  :  partnership 
in  demand,  supplementary  partnership  and  pure  competi- 
tion. We  wish  to  follow  this  classification,  not  as  though 
it  included  everything,  but  because  it  helps  towards  insight 
into  the  reality  to  be  mastered,  and  actual  perception  is 
here  more  important  than  a  formal  discussion  of  tariff 
classifications. 

To  the  class  of  goods  for  which  there  is  partnership  in 
demand  belong  all  those  goods  which  the  two  great  States 
either  do  not  produce  at  all  or  only  in  small  quantities  (such 
as  perhaps  tobacco).  These  are  primarily  the  products  of 
subtropical  and  tropical  climates.  Cotton  is  imported  by 
both  parties  in  large  quantities.  Here  there  is  no  question  of 
any  necessity  for  protection,  but  a  commercial  union  can,  as 
has  been  remarked  before,  make  use  of  the  joint  annual 
purchase  of  almost  900  million  marks  as  a  means  of  securing 
better  terms  from  foreign  nations.     Coffee  is  in  the  same 


TARIFF  PROBLEMS  231 

position,  and  in  this  case  the  taxation  of  a  luxury  comes 
into  view.  The  joint  purchase  is  nearly  350  million  marks. 
The  same  applies  with  sundry  differences  to  wool,  copper, 
silk,  tobacco,  rice  and  many  southern  fruits,  food-stuffs, 
other  metals,  caoutchouc,  foreign  woods,  petroleum  (except 
the  GaUcian  production),  tea,  furs,  etc.  When  the  new 
joint  classification  is  being  prepared,  it  will  be  best  to  place 
by  itself  this  group  of  goods  for  which  there  is  a  partnership 
in  demand,  because  from  the  outset  it  forms  a  common 
objective. 

The  matter  is  not  so  clearly  defined  for  the  group  of 
goods  for  which  supplementary  partnership  exists.  For  in 
this  case  both  customs  areas  generally  produce  a  con- 
siderable amount  for  their  own  use  and  only  supply  one 
another  with  the  surplus,  so  that  as  a  rule  other  sources  of 
supply  come  into  account.  The  example  for  Germany  is  wood. 
Here  Germany  has  a  demand  of  350  miUion  marks,  Austria- 
Hungary  a  surplus  of  over  200  miUion,  which  is  capable  of 
further  increase.  The  easier  the  export  of  wood  for  Austria- 
Hungary  to  Germany  is  made,  the  more  will  Austrian  wood 
be  able  to  force  all  other  woods  off  the  German  market, 
which  will  benefit  Austria-Hungary  and  do  no  direct  injury 
to  Germany,  since  the  readjustment  will  work  mainly  to  the 
disadvantage  of  the  Russians.  The  only  question  is  how 
this  favour  to  Austria  will  affect  the  Russo-German  com- 
mercial treaty.  Here  the  one  advantage  must  be  weighed 
against  the  other.  The  case  is  the  same  in  regard  to  the 
big  demand  in  Germany  for  eggs.  Varying  with  the  annual 
production  it  is  almost  entirely  met  by  Austria  and  Russia, 
and  it  is  possible  by  our  commercial  policy  greatly  to 
increase  Austria's  share  to  the  disadvantage  of  Russia.  In 
1913  Russia  suppUed  us  with  eggs  to  the  value  of  80  million 
marks  and  Austria  to  the  value  of  76  miUion.  These  figures 
might  be  transposed  so  soon  as  GaUcia  is  again  in  order  and 
the  hens  there  have  recovered  from  the  Russian  invasion. 
The  position  is  reversed  in  the  case  of  coal,  an  article  which 
has  not  hitherto  been  touched  by  the  tariff  system,  but 
which  by  joint  syndicates  with  tariff  barriers  under  State 


232  CENTRAL  EUROPE 

control  may  be  helped  forward  into  partnership.  Germany 
exports  pit-coal  of  the  value  of  450  million  marks  (along 
with  an  importation,  mostly  from  England,  of  200  miUion). 
But  Austria-Hungary  has  a  demand  of  over  150  million  in 
excess  of  its  own  coal.  Of  course  differences  of  quaUty  must 
be  taken  into  account,  but  there  is  no  doubt  that  a  better 
adjustment  is  possible.  Austria  is  already  in  possession  of 
the  attainable  German  market  for  hgnite.  Things  are  very 
much  the  same  in  the  case  of  maize,  barley,  malt,  fruit,  in 
short,  for  all  the  home  products  of  our  zone  which  are 
produced  in  surplus  in  one  or  another  place  in  Central 
Europe.  This  group  too  must  be  put  into  the  classification 
by  itself,  since  it  stands  out  with  a  character  of  its  own. 

The  third  group,  which  we  have  called  the  purely  com- 
petitive group,  includes  all  those  products  and  manufactures 
which  from  the  outset  are  produced  in  both  customs 
areas  with  a  view  to  foreign  trade,  and  in  respect  to 
which  Germans,  Austrians  and  Hungarians  come  forward  as 
sellers  to  the  foreigner,  but  in  respect  to  which,  according 
to  the  degree  of  their  abihty,  Germans  will  prevail  in  the 
Austro-Hungarian  market  and  vice  versa.  Many  of  the 
raw  materials  and  some  of  the  half-manufactured  goods 
required  for  this  group  belong  to  the  first  group  mentioned 
above.  The  mutual  competition  in  cotton-spinning  and 
machine-making  affords  an  example.  The  German  manu- 
facturers supply  cycles  to  Austria,  but  the  Austrian  cycle 
makers  wish,  with  equal  justice,  to  supply  them  to  Germany. 
Both  dispute  together  over  the  market  for  cycles  in  the 
Balkan  States.  The  same  apphes  to  arms,  locomotives, 
agricultural  machines,  stoves,  cooking  utensils,  clothing 
materials,  ready-made  underlinen  and  a  hundred  other 
things.  In  this  connection  it  must  be  taken  into  considera- 
tion that  an  industry  which  wishes  to  succeed  in  foreign 
markets  needs,  for  its  own  safety,  to  have  firm  possession 
of  the  home  market.  Thus,  for  instance,  a  Bohemian  textile 
manufacturer  cannot  succeed  in  Roumania  if  meanwhile  the 
Viennese  market  is  taken  from  him  by  competitors  from  the 
German  Empire.     Herein  he  the  most  characteristic  diffi- 


TARIFF  PROBLEMS  233 

culties  of  a  customs  partnership.  The  ipore  Austria- 
Hungary  becomes  an  industrial  State  the  more  anxiously 
will  her  export  industries  regard  an  event  whose  results 
cannot  be  estimated  in  advance.  It  may  be  that  everything 
wiU  go  much  more  easily  than  people  think  beforehand,  but 
no  one  can  give  any  guarantee  for  this.  Hence  the  closest 
attention  must  be  directed  towards  this  group  in  the  case  of 
a  customs  union,  just  as  in  the  case  of  preferential  treat- 
ment. Things  are  simpler  even  now  with  regard  to  the 
vigorous  mutual  export  trade  in  sugar,  for  which  already 
agreements  have  been  arrived  at. 


A  special  group  is  formed  by  the  temporary  duty-free 
importation  of  articles  to  be  re-exported  after  being  worked 
up  (Veredelung).  I  confess  that  it  is  not  easy  to  get  a  good 
grasp  of  this  greatly  varied  class.  Some  examples  must 
serve  to  throw  Ught  on  the  matter  :  the  Austrian  chocolate 
factories  get  their  cocoa  from  abroad,  work  it  up  with 
home-grown  sugar  and  other  ingredients  and  sell  the  finished 
product  abroad,  of  course  generally  elsewhere  than  in  the 
place  of  origin  of  the  raw  material.  But  in  this  way  the 
original  raw  material  is  only,  so  to  speak,  on  a  visit  in 
Austria,  and  is  treated  by  the  customs  administration  as 
only  temporarily  present,  the  duty  being  refunded,  or 
cancelled  if  it  has  merely  been  entered.  But  sugar  is 
exported  combined  with  the  original  product,  cocoa,  so  that 
the  country  outside  the  tariff  barrier  is  confronted  with 
a  new  dutiable  article.  Or  half-finished  furniture  in  the 
rough  is  imported  into  Austria,  there  poUshed,  veneered, 
upholstered  and  then  again  disposed  of  in  foreign  countries. 
In  this  case  practically  no  new  material  is  added,  but  only 
the  value  of  labour.  It  may  so  happen  that  a  sale  is  effected 
when  the  customs  frontier  is  crossed,  but  very  often  the 
object  remains,  during  its  detention  in  Austria,  in  the  posses- 
sion of  perhaps  some  German  of  the  Empire,  who  has  the 
work  in  question  done  in  Austria  because  it  is  done  there 
specially  well  or  cheaply.     In  the  branches  of  the  textile 


234  CENTRAL  EUROPE 

trade  it  frequently  happens  that  dressing  or  dyeing  is 
carried  out  across  the  customs  barrier  since  the  land  frontier 
often  accidentally  cuts  through  an  industrial  province.  The 
most  extensive  business  procedure  of  this  kind  in  Germany 
is  in  the  case  of  rice  pohshing  :  to  the  value  of  85  milUon 
marks.  Then  there  is  benzine  refining,  wood  and  iron 
finishing,  the  fitting  up  of  machinery,  etc.  Here  the  closer 
approach  of  the  two  customs  areas  ought  to  be  received 
from  the  outset  in  as  concihatory  a  spirit  as  is  in  any  way 
possible,  for  nothing  promotes  the  joint  economic  system  so 
much  as  this  kind  of  partnership  in  work.  As  concerns 
foreign  countries  the  customs  and  financial  boundaries  will 
remain  in  existence,  but  in  the  common  home  country  they 
ought  in  principle  to  disappear  in  regard  to  all  working-up 
processes. 


All  duties  are  from  their  nature  somewhat  arbitrary,  for  they 
are  an  additional  factor  introduced  deliberately  into  the  for- 
mation of  prices.  In  the  case  of  the  most  important  duties,  the 
frontier  imposts  on  corn,  an  attempt  has  indeed  been  made  to 
establish  a  sort  of  theory  of  the  proper  height  of  the  duty  out  of 
the  difference  between  home  and  foreign  cost  of  production, 
and  to  say  perhaps  :  the  farmer  in  the  Argentine  can  supply 
wheat  at  so  many  marks  per  ton  cheaper  than  can  the 
farmer  in  Germany,  hence  the  difference  in  cost  of  production 
must  be  expressed  in  the  duty.  We  shall  not  indeed  deny 
that  there  is  actually  some  justice  about  this  conception  of 
the  matter,  but  yet  it  involves  serious  omission.  For  what 
is  taken  as  the  home  cost  of  production  is  already  influenced 
by  increases  of  price  due  to  tariffs,  both  past  and  to  be 
expected,  and  hence  is  not  purely  natural,  and  above  all 
costs  of  production  even  in  the  home  country  differ  widely 
among  themselves  and  are  dependent  upon  the  prices  of 
land,  whether  actual  or  aspired  to.  No  duty  can  in  itself 
be  fixed  on  any  calculable,  basis,  it  is  essentially  an  act 
of  volition.  This  does  not  exclude  the  fact  that  the  duties 
may   be   so  interconnected,   that   if  A   has   been   decided 


TARIFF  PROBLEMS  235 

on,  B  must  follow  it.  So  long  as  there  are  duties  on  articles 
used  for  fodder,  there  must  also  be  duties  on  cattle,  since 
otherwise  evidently  cattle  imports  from  abroad  will  be 
artificially  impelled  in  this  direction  to  the  injury  of  the 
home  cattle-breeder.  So  long  as  there  are  corn  duties  there 
must  be  corresponding  duties  on  flour.  A  superstructure 
of  duties  on  worked-up  products  builds  itself  upon  every 
duty  on  raw  material.  In  this  sense  there  are  duties 
of  the  first  grade  and  duties  of  later  stages.  Thus,  in  order 
to  estabhsh  a  customs  association,  it  is  necessary  to  go 
down  to  the  primary  duties  and  from  thence  work  the 
equality  upwards.  This  is  not  difficult,  as  things  are,  in  the 
case  of  the  corn  tariff,  for  the  treaty  duties  since  1906  are 
almost  equal,  viz.  for  rye  in  Germany  5.00  M.,  in  Austria- 
Hungary  6.00  Kr.,  for  wheat  5.50  M.  and  6.50  Kr.  for  the 
100  kilograms.  This  could  easily  (with  a  uniform  standard) 
be  brought  to  a  common  denominator,  so  that  from  this 
starting-point  the  whole  department  of  com,  flour,  bread 
and  fodder  would  reach  uniformity.  The  case  of  iron 
presents  rather  more  difficulties,  for  pig-iron  pays  in  Germany 
i.oo  M.,  in  Austria-Hungary  1.5  Kr.  =  1.27  M.  And  the 
superstructure  dependent  on  this  base  figure  shows  greater 
differences  still.  Bar-iron  pays,  expressed  in  marks,  2.5  M. 
in  Germany,  5.20  M.  in  Austria-Hungary.  Tin  in  Germany 
varies  from  3.00  M.  to  4.50  M.,  but  in  Austria-Hungary  it 
pays  7.65  M. !  The  diiferences  in  the  case  of  tools,  screws 
and  cutlery  are  quite  enormous ;  here  in  some  cases  the 
Austrian  duty  is  five  times  that  of  the  German  Empire. 
These  duties  on  finished  iron  goods  are  directed  against  the 
imports  from  Germany.  Thus  here  it  would  not  suffice  to 
make  the  primary  figure  the  same,  but  in  addition  the  whole 
superstructure  must  be  agreed  upon.  The  department  of 
textiles  does  not  show  quite  such  extensive  differences,  but 
yet  contains  very  notable  distinctions  ;  here,  however,  the 
number  of  items  is  so  great  that  the  existing  conditions  can 
hardly  be  expressed  in  any  understandable  form  by  a  few 
figures.  The  duty  on  worsted  begins  in  Germany  at  8  M. 
and  increases  according  to  the  qualities  up  to  24  M.,  in 


236  CENTRAL  EUROPE 

Austria-Hungary  it  begins  at  10.20  M.  and  increases  up  to 
40.80  M.  !  Any  one  who  has  not  a  copy  of  the  tariff  duties 
himself  will  find  further  data  of  this  kind  in  the  work  by 
Professor  Philippovich  which  we  have  already  referred  to, 
Ein  Wirtschafts-und  Zollverhand  zwischen  Deutschland  und 
Osterreich-Ungarn.  There  are  also  goods  which  are  duty- 
free in  Germany  because  we  have  no  competition  to  fear  in 
regard  to  them,  but  which  are  protected  by  a  tariff  in 
Austria-Hungary,  as  for  example  many  chemicals.  These 
differences  are  mostly  the  result  of  forcible  pressure  by  the 
interests  affected,  and  will  be  insisted  on  so  much  the  more 
because  in  the  first  instance  they  were  secured  laboriously, 
with  difficulty  and  entreaties.  Consequently,  any  one  who 
wants  to  make  alterations  here  wiU  meet  with  opposition  at 
every  turn  from  those  most  nearly  concerned.  And  in  such 
questions  where  it  is  a  matter  of  money  figures,  those 
interested  are  generally  obstinate  and  are  often  actually 
fighting  for  the  lucrativeness  of  their  capital  and  machinery. 
Thus  no  one  need  suppose  that  a  customs  unity  can  be 
produced,  so  to  speak,  by  a  stroke  of  the  pen  from  above. 
But  above  all  it  follows  from  this  that  the  persons  interested 
cannot  be  made  the  only  judges  in  their  own  affairs,  because 
in  this  case  the  great  national  economic  object  will  hardly  be 
attained. 

If  we  suppose  for  a  moment  that  the  war  had  not  hap- 
pened just  now,  we  should  be  faced  by  the  question  of  the 
renewal  of  the  present  commercial  treaty  system.  Then 
both  sides  would  propose  the  alterations  they  desired,  but 
Austria-Hungary  in  particular  would  try  to  improve  the 
position  of  their  customs  poHcy  in  regard  to  Germany.  For 
there  exists  a  widespread  conviction  in  Austria-Hungary  that 
in  1903  the  special  interests  of  the  country  were  falsely 
represented.  At  that  time  the  Austro-Hungarian  negotiators 
still  proceeded  on  the  assumption  that  a  reduction  in  the 
German  corn  duties  was  of  vital  importance  for  them.  But 
this  was  a  mistake,  for  the  moment  was  at  hand  when 
Austria-Hungary    herself  would   need    corn   from   abroad. 


TARIFF  PROBLEMS  237 

Austria-Hungary  increased  in  amount  of  population  aojd 
consuming   ability,    but   her   agricultural   production   did 
not  increase  to  the  same  extent.    And  the  Austrian  corn 
duties  had  no  noticeable  effect  on  the  latter.     The  conse- 
quence was  that  a  part  of  the  Austro-Hungarian  energies 
were  wrongly  directed.    And  hence  for  the  more  important 
export  items,  namely,  cattle,   cattle  products,   wood  and 
also   fruit,    according   to   the   Austrian   understanding   of 
the  matter,  that  reUef  was  not  obtained  which  a  different 
procedure  would  have  secured.     Whether  this  latter  is  true 
or  not  (and  it  is  hard  to  say  after  the  event),  it  may  anyhow 
be  taken  for  granted  that,  but  for  the  war,  a  serious  effort 
would  have   been  made  by  Austria-Hungarj'  to    obtain 
further  concessions  for  the  articles  of  export  mentioned  by 
a  further  screwing  up  of  the  industrial  duties.     It  would 
certainly  not  have  been  carried  to  the  length  of  a  tariff  war, 
but  the  negotiations  would  have  taken  no  very  smooth 
course.     Temper   in   respect   to   customs   poUcy   was   not 
quite  harmonious  since  there  was  an  obvious  decline  in  the 
export    trade    to    Germany    in    various    directions.    This 
temper  is  now  restrained  by  the  overpowering  importance 
of  the  war  partnership,  but  it  wiU  not  be  entirely  under  the 
surface  during  the  negotiations.     We  must  count  on  it,  and 
may  be  prepared  for  a  regular  trench-making  war  round 
each  individual  item  during  the  conferences  over  the  tariff. 
If,  then,  economic  unity  is  to  be  attained  Austria-Hungary 
must  at  the  same  time  be  assured  that  it  will  not  be  thrust 
into  a  corner.     But  this  means  that  intermediate  customs 
duties  or  something  similar  must  be  set  up  between  the 
two  countries  as  a  protective  measure. 


We  have  already  mentioned  incidentally  that  German  and 
Austrian  textile  firms  may  encounter  one  another  on  the 
Roumanian  market.  This  was  no  example  chosen  at  hap- 
hazard, for  rivalries  in  the  sphere  of  the  Balkan  markets 
form  one  of  the  special  difficulties  in  the  commercial  policy 
of  the  two  Great  Powers.     It  is  not  what  is  bought  there 


238  CENTRAL  EUROPE 

that  makes  the  matter  difficult,  but  what  is  to  be  sold  there. 
The  Austrian  manufacturers  cannot  equal  the  manufac- 
turers of  the  German  Empire  in  distant  and  overseas 
countries,  and  go  thither  gladly  under  the  protection  of 
German  export  firms  and  consulates,  but  in  the  Balkan 
States  they  think  they  possess  a  kind  of  unwritten  preroga- 
tive, and  take  it  amiss  that  in  recent  years  before  the  war 
the  Germans  of  the  Empire  offered  their  goods  with  visibly 
increasing  success  in  Roumania,  Bulgaria  and  even  in 
Serbia.  How  this  is  connected  with  the  Austro-Hungarian 
Balkan  poUcy  may  here  be  left  undecided  :  the  actual  fact 
is  that  in  three  years  (1910-1913)  the  exports  from  the 
German  Empire  to  Roumania  increased  in  value  from  66  to 
140  miUion  marks,  and  to  Bulgaria  from  19  to  30  miUion 
marks,  not  indeed  for  the  most  part  directly  at  the  expense 
of  Austria,  but  yet  in  such  a  way  that  Germany  stands  for 
140  as  a  seller  in  Roumania,  but  Austria  only  for  114.  The 
corresponding  figures  for  Bulgaria  are  in  reverse  order, 
30  :  40  ;  for  Serbia  19 :  37.  Similar  feeUngs  and  experiences 
also  characterise  the  Austro-Hungarian  export  trade  to 
Turkey.  If  we  attempt  to  obtain  a  more  exact  picture  in 
this  case  from  the  customs  records,  we  shall  find  that  the 
German  advance  does  not  proceed  with  equal  weight  in  all 
departments  of  industry.  It  is  greater  in  iron  than  in 
woollen  goods,  but  this  must  be  admitted  :  Austria-Hungary 
has  no  country  except  Bulgaria  and  Serbia  where  it  is  of 
more  importance  industrially  than  Germany.  Without 
colonies,  and  almost  without  special  economic  spheres  of 
interest,  it  is  yet  obUged  to  export  goods  in  order  not  to 
force  its  population  to  emigrate  to  an  even  greater  extent 
than  at  present.  We  Germans  of  the  Empire  ought  first 
really  to  get  a  grasp  of  this  confined  and  isolated  position, 
before  we  object  to  the  suspicion  with  which  the  Austrians 
and  Hungarians  frequently  watch  our  successful  economic 
poHcy.  To  speak  frankly  :  the  Austrian  has  for  us  on 
many  occasions  the  same  feeling  that  we  have  for  the  English 
world-group  economic  system,  a  mixture  of  respect,  envy 
and  defiance.     It  is  unusual  to  speak  of  such  intangibilities  : 


TARIFF  PROBLEMS  239 

the  literature  relating  to  the  customs  partnership  avoids 
these  less  palpable  matters,  but  I  am  firmly  persuaded  that 
without  a  perfectly  frank  exposure  of  all  the  depths  the 
Mid-European  Ufelong  union  wiU  never  come  about.  We 
need  for  it  not  only  a  bargaining  spirit,  but  a  sympathetic 
creative  conviction.  But  this  means  when  translated  into 
practice  :  the  tariff  and  commercial  treaty  between  Germany 
and  Austria-Hungary  will  only  have  a  constructive  signifi- 
cance if  it  reaches  out  beyond  the  mutual  barter  of  advan- 
tages and  disadvantages  to  the  joint  regulation  of  the  foreign 
markets  to  be  kept  or  to  be  won.  If  this  is  not  arrived  at, 
the  treaty  will  in  all  probability  be  a  treaty  of  estrangement. 


The  above,  in  our  opinion,  describes  the  Central  European 
commercial  problem  in  general,  but  we  have  not  yet  entered 
upon  the  question  at  the  root  of  the  present  discussions : 
what  must  be  the  character  of  the  new  treaty.  So  far  we 
have  insisted  on  uniformity  in  the  classification  of  goods, 
and  have  spoken  of  the  necessity  for  a  considerate  adjust- 
ment of  the  transition  ;  two  demands  which  must  be  made 
whatever  be  the  nature  of  the  solution.  But  the  technical 
question  at  the  root  of  the  matter  is  whether  the  two,  or 
three,  commercial  States  desire  to  have  and  are  able  to  have 
a  joint  commercial  policy  with  intermediate  frontiers 
between  the  countries,  or  two  commercial  poUcies  in  whose 
adjustment  they  co-operate.  It  is  the  old  question  of  a 
federal  State  or  a  State  confederation  transferred  to 
commercial  poUcy.  But  the  remembrance  of  this  same  old 
poUtical  dispute  shows  us  how  vague  and  transitory  all 
concepts  are  in  this  connection,  because  in  practice  the 
federal  State  may  have  its  bonds  so  weakened  by  numerous 
exceptions  that  it  means  less  than  a  confederation  of  States 
with  developing  organs  for  conunon  activities.  Hence 
it  is  useless  to  swear  by  one  of  these  formulae  from  the 
outset,  in  any  doctrinaire  spirit.  What  is  needed  is  to  create 
the  will  to  bring  out  further  developments  from  weU- 
conceived  beginnings.     The  existing  technical  possibilities 


240  CENTRAL  EUROPE 

are  ably  analysed  in  a  pamphlet  by  Professor  Julius  Wolf : 
Ein  deutsch-'osterreichish-ungarischer  Zollverhand  (published 
at  Leipzig  by  Deichert).  There  the  question  is  stated  thus  : 
Customs  union  or  preferential  treatment  ? 

A  customs  union  means  that  round  the  frontier  of  the 
joint  territory  (that  is  round  the  trench-made  frontier  of 
Central  Europe)  there  will  be  estabUshed  the  customs 
administration  of  the  union,  with  frontier  stations  and 
officials,  aU  controlled  from  some  central  place  in  Mid- 
Europe.  This  administration  will  levy  the  same  duties  and 
imports  in  accordance  with  like  principles  and  reckoned  in  a 
unified  standard  of  value,  and  so  strict  will  this  equahty  be 
that  it  wiU  be  just  the  same  whether  the  wheat-ship  or  the 
barley-steamer  came  to  port  in  Hamburg,  Bremen,  Mann- 
heim or  Trieste,  or  whether  the  coffee  or  caoutchouc  is  used 
in  Antwerp,  Fiume  or  Cattaro.  A  head  of  cattle  will  be 
treated  no  differently  in  Flensburg  than  in  Semlin  provided 
that  no  further  agreements  are  made  with  these  countries. 
This  idea  supposes  a  joint  machinery  and  that  the  people 
managing  it  will  be  interchangeable  over  the  whole  line, 
since  only  in  this  way  can  equahty  of  apphcation  be 
ensured. 

Preferential  treatment,  on  the  other  hand,  means  that  the 
two  (or  three  ?)  commercial  States  will  remain  in  existence 
afterwards  as  before,  and  will  have  their  own  separate 
machinery  for  the  collection  of  customs,  as  Austria  and 
Hungary  have  at  present,  but  that  they  will  agree  with  one 
another  to  apply  a  joint  classification  of  goods  with  as  far 
as  possible  equal  customs  rates  at  the  outer  frontiers  border- 
ing on  foreign  countries ;  whilst  on  their  mutual  joint 
frontier  either  special  mitigations  or  deductions  of  duty 
will  be  accorded,  so  that  perhaps  20  per  cent,  less  duty 
is  collected  from  friend  than  from  foreigner.  Of  course 
the  percentage  rate  of  the  deduction  may  be  variously 
arranged. 

Intermediate  forms  may  indeed  be  conceived  of  between 
these  two  fundamental  forms,  and  the  future  discussions 
will  probably  centre  round  these  intermediate  forms.     But 


TARIFF  PROBLEMS  241 

before  speaking  of  them  it  will  be  useftil  to  consider  the 
fundamental  forms  themselves. 


Preferential  treatment  offers  one  very  evident  advantage, 
that  with  it  aU  State  rights  remain  as  they  were  before 
and  that  each  section  can  do  what  it  Ukes  in  the  future 
within  the  conditions  of  the  treaty.  On  this  account  it  is 
liked  at  the  present  time,  especially  by  the  Austrians  and 
Hungarians,  and  appears  the  easier  solution.  This  notion 
must,  however,  be  somewhat  disturbed  when  the  matter  is 
examined  more  closely,  for  preferential  treatment  involves 
serious  grounds  for  hesitation  for  Austria-Hungary,  which 
will  be  understood  in  virtue  of  our  previous  exposition.  In 
the  first  place  it  must  be  taken  into  account  that  export 
from  Austria-Hungary  to  Germany  (according  to  the 
German  statistics  827  million  marks  in  value)  is  substantially 
less  than  the  export  from  Germany  to  Austria-Hungary 
(1105  million  in  value).  So  that  if  an  equal  preferential 
quota  is  chosen  it  will  certainly  work  out  more  to  the 
advantage  of  Germany  than  to  that  of  Austria-Hungary. 
But  besides  this  the  German  exports  belong  far  more  to 
the  group  called  competitive  than  do  the  Austro-Hungarian. 
All  the  articles  in  the  group  which  we  have  called  above 
that  of  supplementary  partnership,  disturb  our  home 
production  only  a  Uttle  or  not  at  all.  For  example,  if 
mine  timber  comes  to  us  from  Austria  and  not  from  Russia, 
this  is  pleasant  for  Austria  without  endangering  our  own 
production  of  wood.  But  if  German  smaU-iron  is  brought 
into  Austria  more  cheaply  it  will  be  noticed  in  the  iron  trade 
over  there  as  a  direct  pressure  on  the  home  market.  This 
is  exactly  what  Austria-Hungary  wishes  to  avoid,  viz. 
pressure  on  an  industrial  system  which  is  only  just  beginning 
to  be  conscious  of  advance.  In  order  to  avoid  these  results 
an  attempt  might  indeed  be  made  to  facihtate  supplementary 
importation  to  Germany  by  the  Austrians  and  Hungarians, 
whilst  encouraging  the  German  competitive  imports  as  little 
as  possible.     But  this  will  result  in  an  agreement  which  does 

Q 


242  CENTRAL  EUROPE 

not  differ  in  essentials  from  the  existing  situation  and 
which  can  only  be  of  minor  interest  to  the  German  Empire 
since  it  offers  no  closer  political  union,  sensibly  disturbs 
the  treaties  with  Russia  and  other  States,  and  does  not 
create  a  Central  European  world-group.  The  more  accu- 
rately the  preference  idea  is  thought  out  the  more  dangerous 
it  appears  for  Austria-Hungary,  and  especially  because 
it  includes  no  security  for  the  Austrian  foreign  trade  to 
the  Balkan  States  or  to  other  foreign  countries.  If  Austria- 
Hungary  as  a  whole  were  still  an  agricultural  State  in 
the  old  style,  preferential  treatment  would  be  a  sensible 
arrangement  for  both  sides.  But  since  this  condition  is 
past,  and  since  the  Dual  Monarchy  has  Uttle  more  to  offer 
us  in  respect  to  the  most  important  food-stuffs,  every  settle- 
ment which  is  based  on  simple  give  and  take  must  narrow 
down  Austria's  position  still  further.  By  this  procedure  it 
gains  too  httle  on  the  German  market,  nothing  on  foreign 
markets,  and  must  endanger  its  home  production.  I  should 
not  have  thought  it  necessary,  merely  from  the  standpoint 
of  German  industry,  to  make  these  statements  with  such 
dehberate  clearness  but  that  I  am  of  opinion  that  Mid- 
European  modes  of  thought  should  show  themselves  from 
the  beginning  in  this  matter,  and  that  the  interests  of  our 
companion  in  the  union  should  be  regarded  equally  with 
our  own.  And  so  I  consider  it  a  duty  to  make  my  under- 
standing of  the  position  of  affairs  as  intelligible  as  possible. 


We  have  already  emphasised  the  fact  that  a  customs 
partnership  will  involve  much  greater  introductory  diffi- 
culties and  more  serious  problems  connected  with  individual 
State  rights.  But  it  alone  will  render  it  feasible  for  the 
German  Empire  to  make  provision  for  the  Austro-Hungarian 
economic  futile  as  well  as  for  its  own.  It  involves  for 
Austria  a  certain  sacrifice,  not  to  be  regarded  Hghtly,  of 
economic  independence  and  of  its  rights  as  a  free  State. 
But  in  the  first  place  the  bond  is  mutual,  in  the  second 
place  the  Austro-Hungarian  economic  benefit  will  be  great, 


TARIFF  PROBLEMS  243 

and  in  the  third  place  the  transaction  is  necessary,  according 
to  the  teaching  of  history,  to  the  further  continuance  of  the 
Austro-Hungarian  Dual  Monarchy.  An  Austria-Hungary 
isolated  in  the  world's  economic  system  cannot  put  forth 
sufficient  financial  strength  to  raise  up  its  own  industries 
from  under  the  burden  of  war  debts.  Let  us  grant  that 
Austria-Hungary  must  first  re-examine  thoroughly  all 
other  possibihties  before  taking  the  irrevocable  step  of 
forming  the  customs  partnership.  Irrevocable  it  wiU  be 
even  if  provision  is  made  in  the  treaty  of  union  for  notice 
of  withdrawal,  which  I  for  my  part  advocate  because  the 
possibiHty  of  withdrawal  is  a  certain  safety-valve  against 
dissension,  and  affords  a  handle  for  necessary  alterations. 
But  the  fusion,  even  in  a  single  economic  period,  wiU  be  so 
powerful  that  it  wiU  no  longer  be  possible  to  talk  seriously 
of  complete  separation,  so  long  as  the  mutual  economic 
resources,  with  the  joint  increase  per  cent.,  correspond 
roughly  with  present  conditions.  As  soon  as  Austria- 
Hungary  has  convinced  herself,  after  careful  examination  of 
all  other  possibihties,  of  the  necessity  of  the  future  economic 
partnership,  it  wiU  be  able  to  approach  Germany  with  quite 
different  demands  than  in  the  case  of  a  mere  preferential 
treaty.  For  from  thenceforward  it  wiU  be  not  merely 
economic  advantage  set  against  economic  advantage,  but 
both  parties  will  unite  to  estabUsh  a  world-group  economic 
area.  And  the  extent  of  the  area  thus  united  wiU  be  such 
that  no  resources  need  be  wasted  in  any  part  whatever  of  the 
whole.  When  once  this  foundation  is  laid  Austria-Hungary 
will  not  only  have  the  right,  but  it  will  be  her  sacred  duty 
to  demand  our  agreement  and  co-operation  in  all  the 
measures  which  may  faciUtate  the  transition  and  render 
easy  the  further  working  out  of  all  Austro-Hungarian 
possibihties  of  development.  In  this  way  the  customs 
partnership  will,  of  itself,  become  more  than  a  customs 
partnership.  For  when  once  the  two  sections  have  come  to 
an  understanding  over  the  desire  for  unity,  they  are  techni- 
cally on  the  way  not  only  to  find  means  for  the  customs 
treaties,  but  also  to  solve  with  other  and  better  methods 


244  CENTRAL  EUROPE 

some  portion  of  the  joint  economic  problem,   such  as  a 
State  system  of  storage  and  association  in  syndicates. 


In  various  parts  of  our  book  we  have  already  alluded  to 
the  effects  which  the  experiences  of  war  economics  will 
continue  to  have  in  the  future  after  the  war.  In  particular 
the  storage  of  food-stuffs  and  of  endangered  raw  materials 
and  the  regulation  of  syndicates  for  the  purposes  of  taxa- 
tion will  come  under  consideration.  If  we  assume  that 
both  will  be  taken  in  hand  in  an  assured  partnership,  then 
what  has  hitherto  appeared  as  a  commercial  treaty  will 
divide  itself  into  three  interconnected  groups  of  treaties  : 
storage  treaties,  syndicate  treaties,  and  a  commercicil  treaty 
in  the  narrower  sense  of  the  word.  This  aspect  of  the 
matter  has  been  much  too  Uttle  considered  by  previous 
authors. 

The  central  point  of  the  storage  treaties  will  be  the  State 
granaries.  How  far  these  must  be  extended  to  fodder- 
stuffs,  we  shall  leave  for  later  consideration.  Here  it  is 
essential  from  the  outset  to  place  the  Hungarian  system  of 
farming,  which  supplies  the  only  agricultural  surplus  in  the 
whole  area,  and  whose  surplus  can  become  much 
larger,  in  an  assured  position.  The  Hungarian  farmer 
must  be  placed  completely  on  a  level  with  the  corn-growers 
in  Germany  and  Austria  in  the  unified  economic  system, 
and  be  differentiated  once  for  all  from  all  foreign  com- 
petitors. There  would  be  no  absolute  necessity  for  this 
under  a  bare  system  of  commercial  treaties,  but  from  the 
outset  it  forms  one  of  the  principles  of  a  complete  union. 
In  this  case  the  Hungarian  corn-growers  are  the  same  to  us  as 
are  our  own  great  landed  proprietors  and  small  farmers  : 
they  form  the  basis  of  an  economic  system  of  food-supply  in 
the  Mid-European  union.  After  our  previous  statements 
there  is  no  need  to  explain  further  what  this  signifies  for 
Hungary. 

The  central  point  of  the  syndicate  treaties  will  be  the 
Central  European  iron  syndicate,  through  which,  with  the 


TARIFF  PROBLEMS  345 

co-operation  of  the  State  Governments  concerned,  the 
position  of  the  Austrian  and  Hungarian  iron  industrials, 
hitherto  assured  to  them  through  tariffs  and  State  protection, 
will  be  guaranteed  in  the  form  of  zones  determined  by 
cartels.  What  is  thought  of  as  the  intermediate  customs 
duty  between  the  two  countries  wiU  become  the  tax  paid 
to  the  cartel,  and  the  cartel  as  a  whole  will  pay  the  State 
Government,  a  point  to  which  we  shall  aUude  again  later. 
In  this  way  too  a  definite  partition  of  the  foreign  export 
market  can  be  arrived  at,  and  in  this  way  alone.  The 
proved  organising  powers  of  the  syndicates  on  both  sides 
will  be  placed  at  the  service  of  the  joint  economic  area. 
This,  if  it  succeeds,  will  be  much  better  and  more  effective 
for  the  Austrian  and  Hungarian  iron  industry,  with  all  its 
ramifications  and  superstructures,  than  any  mere  protection 
of  the  home  market  by  tariff.  But  when  once  the  model  of 
a  joint  syndicate  has  been  discovered  in  the  important 
department  of  iron,  this  plan  can  be  apphed,  with  needful 
alterations,  to  all  industries  where  syndicates  are  feasible. 
In  this  way  the  group  of  products  for  which  intermediate 
duties  are  needed  will  decrease  with  every  new  fusion  into  a 
syndicate.  Combined  syndicates  with  well-calculated  quotas 
and  with  a  preferential  hmitation  of  the  home  market  under 
poUtically  guaranteed  penalties  for  their  agreements,  need 
nothing  more  than  the  common  customs  hne  against  the 
foreigner.  This  is  conceived  in  a  very  strongly  syndicalistic 
spirit  and  may  on  this  account  seem  distasteful  at  first  to 
many  of  those  engaged  in  industry.  But  the  fact  itself  that 
we  are  face  to  face  with  the  formation  of  syndicates  in  aU 
main  departments  of  the  manufacture  of  half-finished  goods 
and  of  wholesale  goods  is  already  in  evidence,  and  it  is  only 
a  question  of  laying  hold  of  the  existing  bias  of  the  age  and 
placing  it  in  relation  to  the  Central  European  problem. 

It  is  much  to  be  desired  that  the  foundation  Unes  of  the 
future  systems  of  storage  and  of  the  regulation  of  syndicates 
should  be  laid  down  before  the  erection  of  the  new  Central 
European  tariff  system  is  entered  upon.  For  this  will 
present  quite  a  different  appearance  as  soon  as  the  most 


246  CENTRAL  EUROPE 

difi&cult  main  items  of  the  intermediate  customs  problem 
are  removed.  To  guide  public  discussions  in  this  direction 
is  one  essential  purpose  of  our  book. 


But  what  will  then  be  the  position  of  the  intermediate 
duties  so  often  referred  to  ?  They  will  still  be  necessary  as 
a  means  of  adjustment  for  all  those  productions  which 
cannot  be  better  regulated  in  any  different  way.  The 
following  cases  may  be  distinguished  : 

{a)  One  of  the  two  economic  areas  needs  no  duty  at  all 
on  certain  goods  because  it  stands  of  itself  above  all  com- 
petitors, as  for  example  in  many  sections  of  the  German 
chemical  industry.  In  this  case  the  other  area  may  be 
in  the  position  of  having  a  small  but  yet  not  worthless 
industry  to  protect.  Then,  supposing  that  regulation  by 
syndicate  is  inappUcable,  the  second  area  must  be  entitled 
to  add  an  additional  duty  to  the  joint  tariff  on  its  outer 
frontiers,  and  to  levy  this  additional  sum  as  an  intermediate 
duty  on  the  boundary  between  Germany  and  Austria. 

(&)  In  both  areas  industries  of  the  same  kind  exist  which 
demand  a  like  protection  with  regard  to  the  foreigner, 
but  which  are  of  such  different  strengths  compared  with  one 
another  that  the  one  desires  protection  against  the  other 
in  home  trade,  as  for  instance  certain  sections  of  the  German 
glass  industry  or  of  the  Austrian  clothing  manufacture.  In 
this  case  a  duty  will  be  levied  on  the  inner  boundary  in 
favour  of  the  weaker  party.  This  duty  will  be  less  than 
the  tariff  for  foreigners,  but  high  enough  to  do  away  with  the 
superiority.  This  group  may  be  called  that  of  industrial 
maintenance  duties  {Aufrechterhaltungszolle) . 

(c)  In  both  areas  there  exist  products  which  are  in  a 
weak  position  in  international  trade,  but  which  are  saved 
from  extinction  by  the  support  of  the  home  population. 
Examples  of  this  are  tobacco  as  cultivated  on  certain  tracts 
of  land  in  Germany,  grapes  grown  in  the  less  favourable 
districts,  fruits  cultivated  in  indifferent  cUmates.  These 
cases  will  need  to  be  examined  to  see  whether  here  also  risks 


TARIFF  PROBLEMS  247 

do  not  arise  from  the  union  which  may  be  warded  off  by 
preservative  duties  (Bewahrungszolle). 

The  difference  between  the  second  and  third  groups  is 
this,  that  the  industrial  maintenance  duties  may,  in  the 
abstract,  be  of  a  temporary  character,  either  serving  as 
educational  duties  [Erziehungszolle)  for  infant  industries  or 
making  possible  a  peaceful  remoulding  of  the  industries 
affected.  On  the  other  hand  the  preservative  duties  are 
essentially  of  a  more  permanent  character.  It  is  clear  from 
this  distinction  that  the  demand  to  do  away  with  the  inter- 
mediate duties  cannot  be  urged  in  hke  manner  for  all  such 
duties,  at  any  rate  not  within  a  measurable  space  of  time. 

What  intermediate  duties  and  how  many  of  them  will  be 
necessary  can  only  be  investigated  in  a  most  laborious 
manner  by  going  through  all  the  separate  items.  In  this 
matter  the  first  preHminary  is  to  estabUsh  the  joint  classifica- 
tion. A  possible  average  of  the  existing  duties  will  next  be 
entered  in  this  classification  as  against  foreign  countries,  and 
submitted  for  discussion.  Whether  or  no  in  individual 
cases  not  only  duties  against  the  foreigner,  except  for 
articles  in  group  (a),  but  also  intermediate  duties  calculated 
to  correspond  with  them  will  be  needed,  the  attempt  to 
draw  up  the  tariff  must  show.  In  every  case  where  a  super- 
structure is  added  on  to  the  common  tariff,  it  will  appear 
automatically  on  the  inner  frontier  as  an  intermediate  duty. 

By  this  arrangement  a  customs  service  will  still  be  needed 
on  the  inner  boundary  for  a  very  long  time.  But  this  is 
hardly  avoidable  and  has  its  advantages,  for  by  its  means 
the  economic  position  on  both  sides  can  still  be  distinguished 
for  statistical  purposes,  so  that  people  can  tell  what  each 
party  has  gained  or  lost  through  the  new  joint  system. 
This  is  particularly  necessary  for  the  weaker  section  con- 
cerned, so  that  it  can  protect  itself  if  the  arrangements  do 
not  have  the  effect  that  they  ought  to  have. 


To  provide  for  the  development  of  the  Austrian  foreign 
export  trade  is  one  of  the  most  essential  and  also  one  of  the 


248  CENTRAL  EUROPE 

most  difficult  problems  of  the  joint  commercial  policy. 
Things  axe  much  simpler  so  far  as  Hungary  comes  into 
question,  since  in  this  case  the  exports  are  of  raw  materials, 
and  of  worked- up  products  of  wood  and  corn,  and  will 
remain  predominantly  so  in  the  future.  But  Austria,  as  we 
have  repeatedly  said,  is  in  such  a  position  that  she  thrusts 
her  finished  manufactures,  which  from  their  nature  cannot  be 
sold  in  industrial  Germany,  across  the  frontiers  in  any  direc- 
tion where  they  wiU  not  be  so  fatally  pressed  by  competition 
from  the  German  Empire  and  elsewhere.  We  have  previously 
remarked  that  should  the  economic  partnership  not  come 
into  existence  there  wiU  be  no  possibihty  or  inducement  for 
Germany  to  make  over  to  the  Austrians  and  (so  far  as  they 
wish  it)  to  the  Hungarians,  the  Balkan  market  or  any  other 
eligible  section  of  the  international  market,  as  a  special  zone. 
Now  we  must  touch  upon  the  same  question  again  on  the 
hypothesis  of  an  economic  partnership,  and  declare  in  prin- 
ciple that  the  Austro-Hungarian  industries  will  need  not  only 
intermediate  duties  for  internal  trade,  but  in  the  case  of 
certain  neighbouring  locahties  wiU  need  also  preferential  con- 
ditions for  their  export  trade.  According  to  tariff  technicahties 
this  is  not  easy,  for  it  must  either  be  done  through  commercial 
treaties  with  the  neighbouring  States  affected,  in  which  case 
these  must  agree,  or  through  export  premiums  for  assignable 
Austro-Hungarian  products,  which  must  be  paid  from  the 
joint  customs  receipts.  The  ministries  of  commerce  and 
chief  customs  administrations  will  probably  only  enter  upon 
this  kind  of  regulation  with  reluctance,  but  provisionally  we 
know  of  nothing  better. 

In  connection,  too,  with  the  important  matter  of  the 
Turkish  treaties,  care  must  be  taken  from  the  outset  that 
Austria-Hungary  is  not  passed  over.  The  difference  between 
mere  preferential  tariffs  in  the  sense  of  commercial  treaties 
and  complete  economic  partnership  is  in  practice  hardly  so 
great  anywhere  as  here.  But  we  do  not  intend  to  write 
about  future  Turkish  economic  problems  so  long  as  fighting 
troops  are  occupying  the  trenches  in  GaUipoU. 

A  customs  and  economic  partnership  which  removes  or 


TARIFF  PROBLEMS  349 

reduces  intermediate  duties,  involves,  as  a  matter  of  course, 
financial  consequences  for  the  State  treasuries,  since  the 
customs  receipts  will  be  regarded  as  a  part  of  the  Imperial 
and  State  revenues.  We  shall  speak  at  first  of  the  matter 
not  as  it  affects  State  rights  but  only  as  it  affects  State 
economics.  Even  this  subject  is  so  complex  that  here 
only  its  most  general  characteristics  can  be  indicated. 

The  German  Empire  receives  about  700  miUion  marks  a 
year  from  customs  duties,  in  which  administrative  repay- 
ments are  not  included,  since  these  would  make  the  matter 
still  more  compHcated.  The  Austr o  Hungarian  j  oint  admini- 
stration receives  about  240  milHoii  kronen.  But  the  question 
arises  whether  this  is  properly  lo  be  understood  as  revenue 
from  the  standpoint  of  national  economics,  since  each  duty 
simultaneously  brings  receipts  into  the  State  treasury  and 
increases  expenditure.  For  the  State  itself  is  the  greatest 
purchaser.  All  Government  offices  erect  buUdings,  use  iron, 
buy  leather,  pay  for  uniforms,  employ  workpeople.  And 
above  all,  the  army  of  officials  rightly  demands  higher 
salaries  with  every  increase  in  the  price  of  necessaries. 
Consequently  the  usual  process  is  that  every  increase  in  the 
customs  receipts  is  followed  by  a  screwing  up  of  Government 
expenditure,  and  my  friend  Gothein  is  probably  correct  in 
saying  that  the  State  treasury  itself  has  never  yet  made 
any  real,  permanent  gain  through  tariffs.  But  to  infer 
from  this  that  a  decrease  in  the  duties  will  have  the  effect 
of  reducing  the  expenditure  of  the  State  treasury  is,  to  say 
the  least,  unwise.  And  it  is  even  more  unwise  to  prophesy 
beforehand  whether  and  how  far  the  decrease  in  the  internal 
duties  of  the  Central  European  economic  union  will  show 
itself  in  a  decline  in  State  expenditure.  In  order  to  avoid 
disappointment  the  whole  amount  of  the  decrease  in  receipts 
must  be  written  off.  What  this  will  be  depends  on  the 
height  of  and  the  proceeds  from  the  intermediate  duties. 
A  complete  economic  partnership  without  any  intermediate 
duties  might  mean  for  Germany  a  loss  of  perhaps  60  miUion 
marks  a  year,  and  for  Austria-Hungary  one  of  90  or  100 
million  kronen.     It  is  clear  at  once  that  the  loss  would  be 


250  CENTRAL  EUROPE 

greater  both  in  itself  and  relatively,  in  Austria-Hungary,  a 
fact  which  would  have  to  be  taken  into  account  in  dividing 
the  joint  customs  revenue.  But  no  one  thinks  seriously  of 
an  unchecked  transit  of  all  goods  free  from  intermediate 
duties,  so  that  the  amounts  to  be  deducted  in  the  State 
budgets  will  be  appreciably  smaller,  perhaps  only  a  third 
of  the  sums  quoted.  But  all  this  must  be  explained  from 
the  outset  so  that  objections  may  not  subsequently  be 
brought  forward  on  account  of  it. 

In  regard  to  the  division  of  the  joint  customs  revenue 
probably  the  State  treasuries  concerned  must  be  assured  of 
their  existing  amount  of  revenue — so  far,  indeed,  as  this 
amount  can  be  obtained  under  the  changed  economic 
system  after  the  war — in  order  that  existing  conditions  may 
be  disturbed  as  httle  as  possible  by  the  new  arrangement. 
Whatever  surplus  there  may  be  over  and  above  the  guaran- 
teed sums  will  then  belong  to  joint  objects.  But  this  takes 
us  well  into  the  subject  of  the  following  chapter. 


CHAPTER  VIII 
CONSTITUTIONAL  PROBLEMS 

As  we  look  forward  into  a  future  which  we  ourselves  shall 
never  see,  but  which  will  be  the  "  present  day  "  of  our 
grandsons  and  granddaughters  who  are  born  in  these  days 
of  war,  the  super-State  of  Mid-Europe  appears  before  our 
mind's  eye  as  a  constitutional  body  whose  existence  will 
then  rest  on  its  own  stable  footing  and  which  will  need  no 
special  creation  since  it  is  actually  there.  Is  any  one  still 
engaged  to-day  in  founding  the  German  Empire  ?  It 
exists !  But  before  Mid-Europe  reaches  this  position  of 
obviousness  there  must  unfortunately  be  an  endless  number 
of  debates  and  discussions  over  State  rights ;  so  many  that 
I  am  almost  afraid  lest  people  should  lose  all  enthusiasm 
for  the  business  owing  to  the  interminable  formal  discussions. 
But  what  is  the  good  ?  The  next  generation  must  go 
through  this  confusion  and  noise  of  State  rights.  In  old 
days  an  affair  of  this  sort  passed  comparatively  painlessly 
since  it  was  accomplished  over  the  heads  of  the  mass  of 
little  people.  But  now,  in  this  age  of  democracy  and 
newspapers,  now  every  sentence  will  be  turned  over  a 
hundred  times.  This  is  a  part  of  the  very  character  and 
essence  of  our  time  and  also  of  the  essence  of  the  Mid- 
European  question,  for  Mid-Europe  wiU  assuredly  be  no 
gift  of  princes  but  the  desire  of  the  nations.  The  princes 
will  take  part  in  what  is  necessary,  as  they  nearly  always  do, 
with  more  or  less  pleasure  and  inward  sympathy,  but  they 
do  not  of  themselves  readily  cross  the  laboriously  established 
boundaries  of  sovereign  territories,  unless  the  passing  to  and 
fro  of  the  peoples  is  already  becoming  a  mighty  flood.  And 
the  existing  Government  officials  especially  are  generally 

251 


353  CENTRAL  EUROPE 

conservative  in  the  sense  of  maintaining  their  previous 
mode  of  hfe,  and  they  defend  themselves  partly  against  an 
increase  in  their  duties,  partly  against  the  enforced  under- 
standing with  foreign  officials,  partly  against  the  disarrange- 
ment of  spheres  of  competence  and  business  customs  in 
general.  Almost  all  the  great  things  in  the  world  have  to 
be  wrung  from  those  most  nearly  concerned  in  carrying  on 
affairs,  for  these  are  the  greatest  experts  indeed,  but  at  the 
same  time  they  are  the  most  affected  by  any  alteration.  Of 
course  a  creative  spirit  may  always  arise  in  their  midst,  as 
Bismarck  revealed  himself  in  the  Frankfurt  Federal  Diet, 
but  such  a  development  is  no  historical  necessity.  And  the 
more  difficult  and  insuperable  a  transaction  appears  at  the 
outset,  the  less  is  a  compUcated  heavily  worked  system 
incUned  to  burden  itself  with  preUminary  labours  whose 
results  Ue  in  the  distance  and  whose  success  cannot  be 
foreseen  with  certainty.  Thus  even  the  most  important  of 
present-day  problems  cannot  be  left  with  simple  confidence 
only  to  those  Government  officials  most  nearly  concerned. 
Naturally  they  will  ultimately  have  the  last  word  to  say  in 
this  matter  and  will  undertake  the  technical  formulation, 
but  before  they  speak  the  air  must  be  permeated  by  Mid- 
European  ideas.  In  this  great  present-day  affair  the  will  of 
the  people  will  have  to  show  itself  less  in  the  fact  that  the 
representatives  in  Parhament  finally  give  their  assent  to  the 
treaties  of  union  than  in  the  fact  that  the  temper  of  the 
populations  demands  the  new  creation  as  a  prehminary  to 
all  treaties  and  proposals.  Mid-Europe  must  be  talked 
about,  Mid-Europe  the  coming,  necessary,  indispensable 
State  association  and  union  of  nations.  Every  journaUst  up 
to  the  very  frontier  places  ought  to  help  in  this.  Every  one 
who  has  oratorical  power  ought  to  do  his  share  of  public 
speaking.  Now  is  the  time  for  this,  even  now  before  the 
Peace  Congress  and  before  the  decisive  moment  for  humanity. 
Rise,  Mid-Europe,  in  poetry  and  prose  be  exalted ! 


The  greatest  danger  in  such  thoughts  and  proposals  is, 


CONSTITUTIONAL  PROBLEMS  253 

however,  that  the  opposition  of  the  existing  forces,  arrange- 
ments and  departments  may  be  underestimated.  It  is  so  easy 
to  draft  upon  paper  an  ideal  Mid-European  construction ! 
It  is  merely  necessary  to  borrow  a  few  quite  general  ideas 
out  of  the  treasure  of  existing  conceptions  of  State  rights, 
and  to  apply  them  to  the  subject  to  be  dealt  with.  In  so 
doing  it  is  always  supposed  that  there  is  an  invisible  dicta- 
torial power  over  the  existing  Governments,  which  can 
make  these  ideas  into  binding  precepts.  But  this  is  not 
the  case.  The  carrying  out  of  all  our  ideas  rests  in  reaUty 
in  those  same  hands  which  have  guided  our  States  so  far. 
Certain  changes  of  personnel  may  indeed  be  made,  but  in 
the  main  the  new,  as  old  Liebknecht  once  expressed  it, 
must  always  be  '•'  the  legitimate  child  of  ihe  present."  We 
are  no  Utopia,  but  an  area  occupied  by  ancient  State  forma- 
tions of  the  longest  standing  which  have  grown  up  promis- 
cuously together.  Whether  we  conclude  treaties  or  make 
adjustments  they  must  all,  in  order  to  be  vaHd,  bear  the 
signature  of  the  German  Emperor,  of  the  Austrian  Emperor 
and  of  the  King  of  Hungary,  and  must  be  resolved  upon  by 
the  Bundesrat,  the  Delegations,  the  Reichsrat  and  the 
Reichstag.  We  enter  upon  the  work  with  earnest  and 
serious  remembrance  of  aU  these  essential  factors  and 
co-operators,  none  of  whom  must  fail  if  the  enterprise  is  to 
succeed. 

It  is  very  important  at  this  stage  that  the  content  of  the 
problem  should  not  be  increased,  but  on  the  contrary 
decreased  as  far  as  possible,  since  an  overladen  boat  cannot 
be  pushed  off  from  the  bank  at  aU.  The  final  aims  should 
be  great,  but  the  immediate  demands  should  be  attainable. 
We  cannot  venture  to  ask  that  the  super-State  of  Mid- 
Europe  shall  be  in  existence  after  a  short  delay,  but  only 
that  its  beginnings  shall  be  so  well  conceived  that  the  first 
steps  will  thereupon  of  themselves  lead  further  forward. 
Moreover  it  is  essential  that  the  first  settlements  should  be 
planned  only  between  Germany,  Austria  and  Hungary. 
The  nucleus  must  be  there  before  further  crystallisation  can 
take  place.     The  discussion  of  many  European  States  at 


254  CENTRAL  EUROPE 

once  destroys  businesslike  progress  from  the  outset.  What 
is  wanted  here  is  restrained  and  discipUned  pohtical  imagina- 
tion, no  universal,  boldly  arbitrary  spirit  of  prophecy, 
leaping  over  whole  decades. 


Looked  at  as  technical  poUtics,  the  creation  of  Mid- 
Europe  is  the  centrahsation  of  certain  political  activities, 
that  is  to  say  the  estabUshment  of  fresh  central  points  for 
the  joint  working  of  the  whole  of  the  enlarged  territory. 
But  before  we  speak  of  such  a  centrahsation  it  will  be 
advisable  to  dwell  upon  what  we  cannot  venture  to  influence 
or  to  gain  by  centrahsation.  For  many  objections  to  the 
new  ideas  arise  on  all  sides  from  anxiety  lest  a  foreign  and 
unfamiUar  co-operative  Government  might  interfere  with 
matters  that  we  have  hitherto  desired  under  all  circum- 
stances to  keep  in  our  own  hands.  No  State  becoming  a 
partner  in  the  new  super-State  will  consent  to  sacrifice 
thereby  its  pohtical  dignity,  its  own  sovereignty  which  it 
has  won  with  difficulty  and  defended  with  its  blood.  To 
begin  with  the  Hungarians,  without  whom  we  cannot 
complete  Mid-Europe  ;  they  will  grasp  at  once  the  immense 
advantages  of  the  Mid-European  plan  from  the  point  of 
view  of  economics  and  of  historical  development,  for  they 
have  an  intelligent  knowledge  of  the  world  and  are  clever 
Ccdculators.  But  for  them  the  struggle  waged  by  their 
fathers  for  the  independence  of  a  special  Hungarian  State 
ranks  higher  than  advantage  and  than  the  philosophy  of 
history.  And  they  would  join  in  nothing  which  might  at 
the  same  time  lead  to  any  reduction  of  pohtical  rights  even 
in  the  most  distant  future.  On  this  point  they  are  obdurate, 
and  we  recognise  that  they  are  so.  But  the  same  thing 
apphes  to  the  sphere  of  Austrian  authority.  The  Austrian 
State  knows  its  limitations  and  its  historical  subjections,  it 
has  emerged  from  the  schoohng  of  continual  negotiations 
with  the  Hungarians  over  the  Ausgleich  and  of  ceaseless 
concessions  to  its  individual  refactory  members.  But  in 
spite  of  all  this  it  retains  a  vitahty  of  its  own,  and  that  indeed 


CONSTITUTIONAL  PROBLEMS  255 

both  deep-seated  and  vigorous,  which  will  at  no  price  be 
cut  short  or  injured.  And  again  the  same  thing  applies  to 
the  German  Empire.  It  discovered,  through  Bismarck,  the 
form  suited  to  it,  and  has  worked  with  it  successfully  for  a 
period.  Shall  the  German  Empire  allow  itself  to  be  lectured 
about  its  own  concerns  by  companions  who  have  newly 
joined  themselves  with  it  ?  People  are  ready  on  all  sides 
to  make  certain  necessary  concessions  for  Mid-Europe,  but 
the  dignity  of  the  State  itself  must  not  be  touched.  That 
may  not  please  the  purely  theoretical  thinker,  but  it  is  the 
actual  situation :  Mid-Europe  is  no  new  country.  Hence 
it  is  in  the  interests  of  all  concerned  that  ambitious  schemes 
for  fusion  should  not  be  brought  forward.  In  other  words  : 
imder  the  superscription  Mid-Europe  no  new  State  will  be 
created,  but  a  union  of  existing  States  will  be  formed.  In 
using  the  word  "  super-State "  for  this  union  we  have 
intended  no  decrease  in  poUtical  dignity  for  the  separate 
portions ;  it  ought  not,  wiU  not  and  cannot  mean  this. 
Those  who  determine  on  the  development,  are  responsible 
for  it  and  carry  it  on,  will  be  and  will  remain  the  present 
sovereign  States  concluding  the  treaty.  These  will  make 
mutual  concessions  to  one  another,  but  it  is  they  who  do 
this,  and  they  will  not  cease  to  be  the  subjects  of  future 
joint  activities.  If  people  hke  to  call  the  new  creation  a 
confederation  of  States,  this  hits  its  character,  but  it  cannot 
become  a  federal  State.  The  second  would  indeed  be 
essentially  more  than  the  first,  but  it  is  not  feasible. 


If  it  comes  into  existence  the  Mid-European  State  union 
will  decide  what  matters  shall  be  jointly  regulated  and 
administered.  Here  we  must  exclude  from  the  outset  all 
those  matters  wherein  old  and  sacred  rights  are  inherent  in 
local  and  provincial  peculiarities.  When  we  were  discussing 
creeds  and  nationahties  we  pointed  out  that  these  deeply 
intricate  questions  must  not  be  subjected  to  any  centralised 
regulation,  unless  insupportable  opposition  is  to  be  aroused 
from  the  outset.     We  shall  discover  the  proper  limitation  in 


256  CENTRAL  EUROPE 

this  matter  most  easily  if  we  take  a  general  survey  of  the 
historical  changes  in  the  character  of  the  State.  The  older 
State  was  based  much  more  on  national  and  Church  convic- 
tions, and  much  less  on  economic  organisation  than  the 
modern  great  State.  The  older  State  embodied  the  concept 
of  unity  of  rehgious  belief  amongst  its  subjects  or  citizens, 
and  later,  when  rehgious  unity  became  defective,  the 
concept  of  unity  of  language.  It  had  very  few  economic 
questions  to  regulate  since  the  old  type  of  economic  system 
was  almost  entirely  natural,  local  and  purely  individualist. 
The  commune  sufficed  for  the  management  of  the  former 
common  lands,  the  district  or  the  town  generally  sufficed  to 
regulate  the  old  crafts.  There  were  only  a  few  meagre 
State  provisions  for  far-distant  trade  routes  and  for  extra- 
provincial  trade  rights,  and  the  local  poHce  were  generally 
sufficient  for  social  duties.  But  in  the  place  of  all  this  the 
old  State  busied  itself  much  more  forcibly  with  the  questions 
whether  and  after  what  manner  each  of  its  subjects  wor- 
shipped God  and  what  was  the  prevailing  form  of  religious 
ceremony.  This  was  characteristic  of  the  old  days  when 
the  individual,  though  able  to  look  after  the  cultivation  of 
his  fields  or  his  business  in  primitive  fashion,  was  not  capable 
of  providing  for  his  spiritual  needs.  The  ancient  duty  of 
spiritual  guidance  and  the  care  of  souls  which  pertained  to 
the  State  terminated,  however,  in  some  measure  as  the 
system  of  State  religion  became  permeated  by  a  certain 
increasing  independence  of  the  individual  and  by  the 
developing  self-government,  apart  from  the  State,  of  the 
Church  corporations.  To-day  the  State  is  no  longer  the 
creator  of  conviction  and  the  ruler  of  belief,  but  at  the  most 
a  controlling  influence  to  prevent  any  infringement  of  their 
mutual  boundaries  on  the  part  of  rehgious  sects  and  a 
protector  of  the  system  of  public  rights  and  of  administration 
as  such,  from  any  Church  interference.  These  functions, 
so  far  as  they  are  still  necessary,  belong  exclusively  to  the 
older  types  of  State,  and  even  in  them  are  handed  over  as 
much  as  possible  to  provincial  and  specific  authorities.  The 
world-group  economic  super- State  will  have  nothing  whatever 


CONSTITUTIONAL  PROBLEMS  257 

to  do  with  provincial  churches,  church  law,  ecclesiastical 
legislation  and  representation  before  the  papal  throne,  even 
though  cases  may  be  thought  of  in  which  the  last-named 
matter  is  not  without  far-reaching  political  influence. 

Nor  wiU  the  super-State  have  anything  to  do  with  school 
affairs.  It  is  true  that  practically  everywhere  in  Central 
Europe,  so  far  as  primary  education  is  concerned,  the  school 
is  a  State  foundation,  and  was  mostly  the  work  of  an 
enlightened  State  bureaucracy  before  it  was  able  later  to 
become  an  object  of  parUamentary  care.  The  private  and 
sectarian  school  did  not  suffice  for  the  average  standard  of 
education  needed  by  the  developing  modern  capitalist 
State.  But  when  once  the  necessity  for  universal  popular 
education  is  recognised  ever3rwhere  in  principle,  this  depart- 
ment will  be  made  over  more  and  more  as  time  goes  on 
to  be  worked  by  the  local  communal  administration.  It 
ought  to  be  much  more  decentralised  and  flexible  than  it 
generally  is  at  present.  It  appertains  to  the  legislation,  the 
initiative  and  the  control  of  the  individual  State,  but  is 
never  a  matter  for  higher  State  or  super-State  regulation. 
Even  if  it  be  admitted  that  the  training  of  poHtical  opinion 
in  the  schools  greatly  affects  the  world-group  super-State, 
yet  a  sharp  limitation  must  be  imposed  on  sovereign  rights 
lest  a  door  should  be  opened  for  the  effects  of  majority 
votes  and  pressure  in  a  sphere  where  those  most  nearly 
concerned  ought  to  have  the  responsibihty.  Voluntary 
congresses  relating  to  school  affairs  may,  and  certainly  wiU, 
be  arranged  for  the  whole  of  Central  Europe,  but  no  legis- 
lation which  goes  beyond  existing  frontiers  will  be  passed 
on  the  subject. 

In  this  it  is  partially  implied  that  the  much  disputed 
language  question  must  be  left  to  the  decision  of  the  indi- 
vidual States.  Although  these  language  disputes  may 
manifest  themselves  in  school  or  law  court  or  army,  and 
must  there  be  settled  as  required,  yet  in  principle  they  are 
no  subject  for  Central  European  deUberations.  This  may 
indeed  appear  a  somewhat  bold  statement,  because  the 
general  arrangements  for  the  army  and  for  intercommunica- 


258  CENTRAL  EUROPE 

tion  in  Central  Europe  will  undoubtedly  require  a  certain 
unity  of  language,  as  the  war  has  shown  us  most  effectively 
in  regard  to  the  railways  in  GaUcia.  But  it  will  be  quite 
impossible  for  the  small,  non-German  nations  to  join  them- 
selves to  Mid-Europe  with  feeUngs  of  complete  freedom  and 
contentment,  if  they  run  any  risk  of  their  language  question, 
to  which  they  attach  such  importance,  being  decided  piece- 
meal by  an  unapproachable  central  authority  high  above 
them.  This  shows  how  little  scope  there  is  for  a  purely 
academic  building  plan  for  Mid-Europe  if  it  is  to  succeed. 
In  spite  of  our  sympathy  for  the  language  rights  of  the 
Germans  in  Hungary  we  Germans  yet  cannot  dream  of 
depriving  the  Hungarians  of  any  of  their  self-governing 
powers,  in  the  Magyar  sense,  by  means  of  any  sort  of 
superior  Mid-European  decrees,  because  this  would  mean 
the  total  impossibility  of  Mid-Europe.  We  anticipate  that 
the  union  of  the  Central  European  States  will  soften  all 
language  disputes  and  will  thrust  them  into  the  background 
by  means  of  new  work,  new  aims  and  new  successes  shared 
in  common.  We  hope  that  no  Pole  in  Prussia  and  no 
German  in  the  Banat  will  in  future  have  unnecessary  language 
difficulties,  but  in  our  present  situation,  where  it  is  a  question 
of  definiteness  in  regard  to  State  rights,  it  must  be  asserted 
firmly  that  this  matter,  however  important  it  is,  yet  cannot 
be  of  a  Mid-European  character. 


The  whole  sphere  of  internal  administration,  the  constitu- 
tions of  commune  and  State  in  the  narrower  sense  of  the 
word,  will  also  remain,  without  further  discussion,  undis- 
turbed by  the  Central  European  State  union.  The  question 
of  the  State  constitution  demands  some  further  explanation, 
for  it  is  hkely  that  the  democratic  parties  in  all  the  connected 
countries  will  attempt  to  direct  the  great  process  of  trans- 
formation which  is  clearly  at  hand  everywhere  after  the  war, 
in  such  a  way  as  to  secure  a  standard  law  for  universal, 
equal  and  direct  suffrage  in  Mid-Europe.  The  returning 
warriors  will  say  with  justice  that  every  humble  and  insignifi- 


CONSTITUTIONAL  PROBLEMS  259 

cant  man  has  been  obliged  to  stake  his  life  for  the  Fatherland, 
and  that  citizen  rights,  complete  and  without  reserve, 
are  therefore  his  due.  I  share  this  view  entirely  and  shall 
advocate  it  in  Prussia  with  all  my  power,  but  I  contest  the 
idea  that  this  suffrage  fight  which  will  probably  set  in  after 
the  war  can  be  a  Mid-European  concern.  Mid-Europe 
includes  countries  of  different  composition  and  at  different 
stages  of  development,  hence  the  existing  differences  in  the 
internal  constitutions  of  the  States  must  be  tolerated  in 
themselves  on  principle.  No  doubt  internal  poUtical  move- 
ments of  hke  tendencies  will  try  to  get  into  touch  with  one 
another,  and  will  learn  from  each  other,  but  the  State 
ParUaments  are  a  law  to  themselves  and  must  so  remain. 
Neither  the  Hungarian  nor  the  Austrian  constitution 
altogether  suits  us  Germans  of  the  Empire  and  vice  versa. 
Here  also  the  situation  is  this  :  that  the  consequences  of 
the  parUamentary  rights  of  individual  States  are  at  the  same 
time  Mid-European  in  character,  since  the  economic  and 
commercial  poHcy  of  the  State  union  depends  on  the  com- 
position of  the  governments  and  representative  assembUes 
of  the  individual  States.  But — ^he  who  tries  to  grasp  too 
much  loses  everything.  Neither  Prussia  nor  Hungary  will 
ever  commit  themselves  to  a  sacrifice  of  their  special  historical 
constitutional  forms  on  the  Mid-European  altar.  Struggles 
of  this  sort  must  be  fought  out  separately  in  the  different 
territories  in  future  as  in  the  past,  until  in  this  way,  as  we 
hope,  a  Mid-European  standard  of  citizen  rights  wiU  grow 
up  at  last  in  reaUty  everywhere. 

The  same  is  true  of  all  the  laws  and  ordinances  which 
regulate  the  position  of  the  representative  assembly  and  of 
the  Crown.  Under  no  circumstances  must  Crown  rights  be 
touched  upon  through  the  creation  of  Mid-Europe,  because 
that  would  be  the  most  certain  way  to  ruin  the  whole 
affair  in  its  beginnings.  This  is  so  obvious  that  it  requires 
no  further  explanation.  Moreover,  the  different  types  of 
parhamentary  and  non-parUamentary  government  are 
and  will  remain  the  business  of  the  countries  concerned. 
Hungary  is  strongly  parUamentary  in  virtue  of  its  franchise 


26o  CENTRAL  EUROPE 

law  and  its  electoral  practice,  Austria  is  unparliamentary  in 
principle  with  varpng  concessions  in  practice  to  majorities. 
The  German  Empire  as  a  whole  is  theoretically  unparlia- 
mentary with  increasing  account  taken  of  the  position  of 
the  parliamentary  majority.  The  individual  States  within 
the  German  Empire  vary  from  Mecklenburg  to  Baden.  All 
this  in  the  future,  too,  will  grow  according  to  its  own  law 
of  development,  and  everywhere  parUamentary  influence  wiU 
surely  increase  during  the  great  financial  negotiations  after  the 
war,  but  this  can  be  no  concern  of  the  Mid-European  union. 

But  from  this  it  follows  already  that  the  administrative 
bodies  and  the  representative  assembUes  of  the  Mid- 
European  union,  so  far  as  these  are  needed,  will  not  be 
elected  or  summoned  on  an  equal  system.  This  is  a  genuine 
and  serious  defect,  for  the  system  by  which  the  managers 
and  inspectors  of  a  business  are  selected  is  never  without 
influence  on  the  business  itself.  But  I  repeat  what  has 
been  already  often  said  :  Mid-Europe  is  a  superstructure 
and  not  a  new  building  !  The  existing  buildings  must 
remain  standing  ! 

The  attentive  reader  may  be  surprised  that  I,  who  am  at 
such  pains  to  urge  the  foundation  of  Mid-Europe,  am  so 
diUgent  in  reckoning  up  what  must  not  be  Mid-European. 
But  whenever  I  picture  to  myself  in  private  all  the  necessary 
partners  in  the  union,  I  feel  myself  strongly  impelled  to 
assure  them  first  of  their  own  long-accustomed  ground 
under  their  feet,  before  I  venture  to  discuss  with  them  the 
free  movements  and  fresh  constructions  of  universal  history. 
Even  to-day  there  are  all  kinds  of  anxieties  at  the  thought 
of  Mid-Europe,  and  these  anxieties  may  be  the  grave  of  all 
our  hopes  if  we  cannot  understand  how  to  deal  with  them 
humanely.  The  new  ought  never  to  come  Uke  a  landsHp, 
it  must  appear  Hke  healthy  and  gentle  growth,  Uke  a  natural 
increase,  not  Hke  disorganisation.  Hence  we  shall  try  to 
build  up  the  plans  for  unity  in  what  follows  only  on  the  basis 
of  treaties  between  sovereign  States  with  equal  rights,  leaving 
it  at  first  an  open  question  how  far  such  treaties  should  be 
terminable  or  not. 


CONSTITUTIONAL  PROBLEMS  261 

Numerous  treaties  already  exist  to-day  between  nearly  all 
the  States,  and  in  particular  between  Germany  and  Austria- 
Hungary,  through  which  standards  of  equality  are  formed 
for  the  subordinate  groups  in  single  departments  of  the  life 
of  the  State.  And  such  treaties  will  also  be  beneficial  and 
possible  in  considerable  abundance  in  reahsing  the  goal 
Mid-Europe.  To  refer  to  existing  precedents  we  call  to 
mind  the  post  and  telegraph  treaties,  extradition  treaties, 
na\agation  treaties,  the  agreements  about  intercourse  on  the 
frontiers,  the  AustrO-German  treaty  for  the  avoidance  of 
double  taxation,  the  settlement  about  the  law  of  guardian- 
ship, sanitary  conventions,  the  agreement  for  the  sup- 
pression of  the  white  slave  trade,  the  international  marriage 
law,  the  Geneva  Red  Cross  Convention,  the  international 
copyright  law,  the  sugar  convention  and  other  similar 
examples.  The  majority  of  these  treaties  are  not  Central 
European  in  the  narrower  sense,  but  through  them  an 
available  method  has  been  discovered  in  the  past  to  prepare 
the  way  for  legal  and  administrative  conditions  which 
transcend  the  separate  States,  without  infringing  upon 
sovereignty.  Treaties  of  this  kind  must  now  be  established 
in  an  increasing  number  within  the  Central  European  terri- 
tory. They  may  be  divided  into  two  principal  groups : 
treaties  which  are  carried  out  by  each  State  through  its 
own  officials  in  its  own  way  and  without  joint  control,  and 
treaties  which  owing  to  their  nature  require  a  mixed  Joint 
Commission  to  carry  them  out.  The  latter  group  thus  paves 
the  way  for  joint  administration  in  Umited  spheres.  It  wiU 
be  much  more  readily  and  frequently  possible  between  two 
States  with  a  permanent  aUiance  and  a  joint  trench  system 
than  between  two  States  which  still  have  to  reckon  with  the 
possibility  of  mutual  war.  Of  it,  therefore,  we  must  speak 
more  precisely. 

After  the  war  general  international  treaties  will  be  again 
renewed  or  established  in  great  numbers.  We  do  not  refer 
here  to  the  peace  treaty  proper  or  to  future  poUtical  agree- 
ments between  States  about  foreign  policy  ;  we  are  thinking 
rather  of  treaties  hke  those  mentioned  above.     Their  scope 


262  CENTRAL  EUROPE 

extends  over  the  whole  poUtically  organised  world.  Within 
them  throbs  the  evolving  world  organisation.  The  special 
State  treaty  of  the  united  world-group  area  has,  however, 
its  special  character  as  compared  with  them.  For  here  an 
exchange  may  take  place,  not  only  of  principles  and  rules, 
but  also  of  the  persons  to  carry  them  out.  Here  the  laws 
and  orders  for  enforcement  will,  whilst  preserving  complete 
independence,  yet  conform  as  far  as  possible  to  one  another 
even  in  the  wording,  and  the  unity  of  the  whole  world-group 
organism  will  be  aimed  at,  as  far  as  conceivable,  by  all 
legislative  ^means.  In  this  connection  the  words  "  as  far 
as  possible,"  "  as  far  as  conceivable  "  are  unavoidable,  for 
in  them  lies  the  independence  of  the  individual  sections. 
The  final  examination  into  the  practicabiUty  of  any  fresh 
modification  and  adjustment  will  be  effected  in  the  usual  way 
in  the  existing  political  capitals,  just  as  we  have  already  in 
the  past  dealt  with  transport  treaties,  legal  agreements  or 
other  similar  matters  in  Berlin,  Vienna  and  Budapest. 

Let  us  suppose  as  an  example  that  the  joint-stock  company 
legislation,  the  insurance  company  legislation  and  the 
practice  of  State  inspection  of  the  Exchanges  in  Mid-Europe 
are  to  be  approximated  to  one  another.  Then  for  this 
purpose  there  must  be  an  expert  Mid-European  preparatory 
Commission  sent  from  the  proper  departments  in  the 
States  concerned.  This  Commission  will  do  the  pre- 
liminary work  with  the  assistance  of  representatives  of 
those  interested,  until  the  material  is  taken  over  by  the 
Foreign  Offices.  If  the  Foreign  Offices  have  serious  hesita- 
tions they  may  refer  the  business  back  again  to  the  Mid- 
European  Commission  in  question,  until  a  form  is  arrived 
at  which  (as  in  the  present  procedure  in  the  case  of  poUtical 
treaties)  is  submitted  as  the  draft  treaty  in  both  the  States, 
subject  to  the  assent  of  the  legislative  factors.  Whether 
this  draft  treaty  may  still  be  referred  back  again  or  now 
must  simply  be  accepted  or  rejected,  may  be  doubtful 
since  either  procedure  has  its  advantages  and  disadvantages. 
The  content  of  the  treaty  wiU  now  either  be  such  that  each 
State,  as  already  said,  carries  it  out  under  its  own  control 


CONSTITUTIONAL  PROBLEMS  263 

and  with  its  own  administration  and  jurisdiction,  or  such 
that  through  the  treaty  a  Joint  Committee  will  be  set  up  to 
make  regulations  for  carrying  it  out,  for  administrative 
decisions,  the  training  of  officials  and,  in  the  future,  also  for 
current  control  and  for  managing  direction,  such  as,  for 
example,  a  joint  Office  for  granting  Permits  for  Capital 
Issues.  These  joint  managing  Commissions  or  Committees 
can  then  be  freely  appointed  by  the  different  Governments 
in  virtue  of  the  treaty,  and  paid  according  to  an  agreed 
schedule.  They  are  subject  to  the  criticism  of  all  the 
Parliaments  concerned,  but  are  independent  within  their 
sphere  of  activity  for  the  duration  of  the  treaty.  They  are 
Mid-European  organs,  without  there  being,  properly  speak- 
ing, a  Mid-European  State. 


It  is  obvious  that  these  arrangements  have  their  serious 
defects  and  do  not  appear  very  inviting,  for  they  require 
homogeneous  work  from  a  Board  {Kollegium)  which  obtains 
its  authority  from  various  sources,  and  they  entrust  that 
legislative  preparatory  work,  which  otherwise  would  naturally 
fall  to  a  parliamentary  commission,  to  an  officially  summoned 
Committee.  If  goodwill  is  lacking  it  wiU  be  an  easy  matter 
for  each  of  the  federated  Governments  and  every  strong 
parliamentary  majority  to  bring  this  machinery  to  a  stand- 
still because  its  own  power  of  motion  is  too  small.  This  must 
be  readily  granted,  but  it  is  part  of  the  complicated  Mid- 
European  problem  that  we  should  be  obHged  to  follow  such 
adventurous  paths.  Yet  here  we  have  complete  confidence 
that,  given  favourable  results  from  the  first  and  second  of 
such  Mid-European  Commissions,  the  work  of  the  third  and 
fourth  wiU  be  much  easier  because  by  that  time  a  tradition 
will  have  grown  up.  All  poUtical  activity  in  the  absence  of 
a  tradition  is  Uke  some  one  trying  to  ride  a  bicycle  before  he 
has  learnt  how.  But  when  once  he  has  learnt  grasp  and 
balance,  he  goes  on  afterwards  almost  as  though  it  were  his 
nature.  And  besides,  preliminary  stages  of  this  kind  must 
be  gone  through  in  any  case,  even  if  the  business  procedure 


264  CENTRAL  EUROPE 

in  Mid-Europe  were  to  be  very  different  and  much  more 
centralised  than  we  have  proposed. 

Even  the  customs  partnership  in  the  sense  in  which  we 
have  discussed  it  in  the  previous  chapter  will  certainly  not 
be  possible  without  some  permanent  joint  mechanism  for 
carrying  out  decisions  and  setthng  accounts.  The  same 
applies  to  a  joint  storage  system  involving  the  State  pur- 
chase of  corn,  and  to  a  joint  regulation  of  syndicates.  It 
also  applies  to  a  joint  fund  for  war  debts  and  indemnities, 
should  such  a  fund  be  resolved  on.  Whether  or  no  a  joint 
Patent  Office  will  subsequently  be  added  or  a  joint  Railway 
Department  or  a  joint  Navigation  Department,  these  and 
many  other  similar  points  are  for  later  consideration.  Some 
offices  of  this  kind  must  first  be  in  existence  and  at  work 
before  new  ones  are  added.  It  was  for  this  reason  that  we 
declined,  in  our  first  chapter,  to  give  a  complete  programme 
of  future  Mid-European  State  activities.  It  is  to  be  hoped 
that  this  may  and  will  be  the  business  of  the  following 
generation. 

But  when  once  we  picture  to  ourselves  a  certain  number 
of  such  Mid-European  Commissions  or  higher  administrative 
departrnents,  they  form  together  something  like  a  Mid- 
European  Central  Administration.  For  this  reason  the 
Commissions  ought  to  be  housed,  so  far  as  is  feasible,  in  the 
same  place.  This  place  will  become  for  Mid-Europe  in  a 
modernised  and  better  fashion  what  once,  though  with  a 
mistaken  constitution,  Frankfurt-on-Main  was  or  should 
have  been  in  the  old  German  Confederation.  But  probably 
some  of  the  higher  departments  must  be  located  where  the 
special  professional  knowledge  concerned  is  available  at  the 
closest  quarters.  To  show  how  I  conceive  of  the  division 
I  should  propose  Prague  as  the  Mid-European  centre  for  all 
business  connected  with  treaties  that  is  not  obliged  to  be 
done  locally,  but  at  the  same  time  I  should  locate  the  centre 
for  overseas  trade  at  Hamburg,  the  central  money-market 
at  Berhn,  and  the  legal  centre  at  Vienna.  But  this  is  only 
of  value  as  a  provisional  suggestion  for  the  sake  of  clearness. 


CONSTITUTIONAL  PROBLEMS  265 

Whilst  discussing  the  treaty  system  as  the  basis  of 
Mid-European  unity  we  have  hitherto  tacitly  done  so  as 
though  the  German  Empire  on  the  one  hand  and  the  Austro- 
Hungarian  Monarchy  on  the  other  were  in  themselves  two 
simply  constituted  States.  But  this  they  are  not.  They 
are  themselves  the  laborious  constructions  of  treaties,  and 
upon  their  remarkable,  historical  lower  stratum  this  further 
upper  story  of  treaties  must  be  erected.  And,  moreover, 
the  two  Empires  are  different,  very  different,  in  their 
theoretical  and  actual  structure.  Hence  it  will  be  necessary 
to  consider  the  Mid-European  treaty  system  first  from  the 
standpoint  of  the  German  Empire,  and  then  from  that  of 
Austria-Hungary.  In  so  doing  we  shall  start  in  both 
cases  from  the  question  how  State  treaties  come  into 
existence. 

In  the  German  Empire  the  right  to  conclude  State  treaties 
is  definitely  and  undoubtedly  an  Imperial  right.  The 
Emperor,  as  representative  of  the  Empire  in  international 
law,  has  to  enter  into  aUiances  with  foreign  States.  But 
in  matters  which  fall  within  the  scope  of  imperial  legislation 
he  is  bound,  in  regard  to  the  conclusion  of  the  treaty,  to 
have  the  assent  of  the  Bundesrat,  and  in  regard  to  its 
validity  to  have  the  ratification  of  the  Reichstag.  Here,  in 
theory,  there  is  at  once  ground  for  dispute,  for  it  is  not 
always  clear  whether  these  conditions  were  satisfied  in  the 
particular  case  or  not.  Still  the  existing  practice  has  led  to 
no  special  difficulties.  So  far  as  we  can  see,  it  is  necessary 
that  all  treaties  of  an  economic  or  legal  character  or  relating 
to  means  of  communication  on  their  technical  side,  and  all 
agreements  which  involve  financial  obligations,  should  take 
their  course  through  the  Bundesrat  and  Reichstag.  The 
matter  is  questionable  in  regard  to  purely  poUtical  treaties 
about  foreign  policy  and  miUtary  agreements  on  the  one 
hand,  and  to  mere  arrangements  about  ordinances  for  carry- 
ing out  measures  on  the  other.  We  shall  speak  later  on  more 
particularly  of  the  first  group,  the  poUtical  and  mihtary 
State  treaties,  and  it  is  not  worth  while  to  go  into  details 
here  about  the  ordinances.     But  there  exists  already,  in  the 


266  CENTRAL  EUROPE 

text  of  Article  ii  of  the  Constitution  of  the  German  Empire, 
an  important  distinction  between  the  co-operation  of  the 
Bundesrat  and  of  the  Reichstag.  The  Bundesrat  is  re- 
quired to  conchide  [Abschlusz),  the  Reichstag  to  ratify 
[G'uUigkeit).  This  means  in  actual  fact  that  the  nego- 
tiations for  the  drawing  up  of  treaties  are  carried  on  under 
the  direction  of  the  Bundesrat  without  the  direct  co- 
operation of  the  Reichstag,  whilst  only  the  final  draft  is 
presented  to  the  Reichstag  for  acceptance  or  rejection.  But 
since  in  the  case  of  tariff  treaties,  and  in  most  other  cases, 
the  negotiations  can  only  be  carried  on  by  the  Bundesrat 
on  the  basis  of  existing  Imperial  laws,  the  Reichstag  has 
generally  a  voice  in  the  matter  at  the  very  beginning  of 
these  negotiations,  as  for  example,  through  the  introduction 
of  minimum  and  maximum  rates  in  the  customs  tariff. 
This  process  of  conducting  the  business  of  treaty-making  in 
the  German  Empire  would  be  very  involved  if  the  method 
had  not  long  since  been  smoothed  out  and  cut  short  by 
custom.  Thus  the  work  of  the  Bundesrat  is  accomplished 
through  the  Imperial  Departments  and  these  have  in 
practice  become  much  more  independent  than  appears 
from  the  text  of  the  constitution.  Consequently  the  whole 
preliminary  work  is  carried  on  by  them  in  constant  touch 
with  the  Prussian  Ministry  and  the  representatives  of  the 
federated  States,  and  in  many  cases  the  consent  of  the 
Bundesrat  is  only  the  last  and  formal  acceptance  of  a 
document  which  is  already  in  fact  complete  That  tradition 
already  exists  of  which  we  have  previously  said  that  for 
Mid-Europe  it  needs  first  to  be  formed.  Any  one  who 
looks  at  the  Government  machinery  of  the  German  Empire 
merely  as  a  student  of  constitutional  forms  would  think  it 
much  more  compUcated  than  do  those  who  have  the  oppor- 
tunity of  observing  it  at  work.  Not  that  no  friction  occurs  ! 
But  it  is  only  the  necessary  friction  which  is  unavoidable 
in  all  forms  of  collegial  action.  The  Office  of  the  German 
Imperial  Chancellor  forms  a  central  point  for  adjustments 
such  as  unfortunately  does  not  exist  in  Austria-Hungary 
with   the   same   efficiency   and   coherence.     A   real   check 


CONSTITUTIONAL  PROBLEMS  267 

can  scarcely  occur  so  long  and  in  so  far  as  there  is  a  funda- 
mental understanding  between  the  Imperial  Chancellor's 
Office  and  the  majority  in  the  Reichstag.  This  means — 
and  this  is  significant  for  the  Mid-European  problem — that 
the  state  of  affairs  is  itself  sufficiently  definite  in  spite  of 
the  obscurity  of  the  clauses.  The  security  for  the  con- 
tinuance of  the  treaty  system  when  begun  lies  in  the  per- 
manence of  the  Imperial  Chancellor's  Office  and  in  the 
comparative  stability  of  the  parliamentary  relations  in  the 
German  Empire.  It  cannot  be  doubted  that  the  deter- 
mination to  estabUsh  Mid-Europe,  when  once  formed,  wiU 
not  subsequently  be  subject  to  any  great  variations.  The 
first  debates  will  abound  in  objections  and  attempts  at 
alteration,  but  then  the  machinery,  as  far  as  the  German 
Empire  is  concerned,  will  soon  work  quite  quietly,  and  the 
addition  of  new  treaties  to  the  system  when  it  has  once 
started  will  in  all  human  probabiUty  go  on  without  any 
fresh  disturbances  of  importance. 


We  are  not  so  sure  about  a  quiet  progress  of  events  in 
Austria-Hungary  since  there  the  constitutional  bases  and, 
above  all,  the  traditions  of  government  are  different. 
Austria  and  Hungary  are  two  States  which  are  as  it  is 
dependent  on  mutual  treaties,  and  which  have  accomphshed 
between  themselves  almost  exactly  what  should  now  be 
repeated  for  them  and  for  us  in  the  upper  story  of  the 
world-group  area.  Consequently  the  Austrians  and  Hun- 
garians have  incomparably  more  experience  in  this  matter 
than  we  Germans  of  the  Empire,  but  an  experience  that 
is  not  without  its  scars  and  bruises.  In  spite  of  the  unity 
of  the  throne  at  the  head,  the  department  of  adjustment 
is  lacking  which  the  Imperial  Chancellor's  Office  suppUes 
for  us.  The  Sovereign  acts,  so  to  speak,  by  himself  in 
his  two  capacities  as  Austrian  Emperor  and  as  King  of 
Hungary.  The  unity  ultimately  rests  with  him,  with 
him  but  not  with  an  Imperial  Department,  for  the  joint 
Ministry  is  not  a  supreme  authority  for  both  States,  but 


268  CENTRAL  EUROPE 

a   Central  Administration  based   on  treaties   such   as  we 
have   outHned   above   for   Mid-Europe.     Expressed   other- 
wise :  the  Imperial  unity  of  the  Austro-Hungarian  Monarchy 
covers  many  fewer  objects  than  does  that  of  the  German 
Empire.     In  virtue  of  the  law  of  1867  it  comprises  the 
unity  of  the   Foreign  Office,   of  the  management   of  the 
army  and  the  expenses  arising  out  of  it,  and  in  addition  the 
joint    administration    of    Bosnia    and    Herzegovina.     The 
Delegations,  that  rudimentary  Imperial  Parliament,  have 
only  to  determine  points  connected  with  these  matters. 
Everything  else  appertains  to  the  special  Governments  of 
the   two   States.     To   these   appertain,    for   example,    the 
sanctioning  of  international  treaties  and  the  recruiting  for 
the  army,  two  points  of  the  very  greatest  importance  for 
our  investigation.     Thus  when  we  conclude  treaties  with 
Austria-Hungary,  as  we  have  aheady  done  and  as  we  wish 
to  do  very  much  more  in  the  future,  we  conclude  them 
formally    with    the    homogeneous    body   representing    the 
Foreign  Office  but  actually  with  two  States  and  two  ParUa- 
ments.     From  our  point  of  view  it  would  be  simpler  if  each 
of  these  two  States  could  do  business  with  us  independently, 
since  then  the  number  of  factors  concerned  would  be  smaller. 
But  this  remark  has  a  merely  academic  value  because  we, 
as  weU  as  the  Austrians  and  Hungarians,  have  to  reckon 
with  the  existing  position  of  the  State  as  an  actual  fact.     All 
this  would  give  just  as  little  ground  for  hesitation  as  the 
comphcated  system  of  political  law  in  the  German  Empire, 
if  the  tradition  in  Austria-Hungary  were  as  firmly  estabhshed 
as  it  is  with  us.     But  this  is  unfortunately  not  the  case  as 
is  shown  by  the  course  of  events  hitherto.     The  unity  of  the 
State,  it  is  true,  is  firmly  maintained  upon  the  whole  and 
will  be  more  secure  after  the  war  than  before,  but  all  treaty 
ties  between  Austria  and  Hungary  are  only  concluded  for 
definite  periods  of  time,  and  their  renewal  is  invariably 
accompanied   by    difficult    negotiations    concerning   treaty 
and  Ausgleich.     According  to  our  political  experience  it 
will  be  very  unfamiHar  and  very  undesirable  for  us  Germans 
of  the  Empire  to  have  to  share  in  these  convulsions,  and 


CONSTITUTIONAL  PROBLEMS  269 

many  critics  on  our  side,  notwithstanding  a  most  sympa- 
thetic grasp  of  the  principle  involved,  hesitate  at  the 
establishment  of  a  Mid-European  system  of  treaties,  because 
they  do  not  wish  to  be  drawn  into  recurrent  conflicts  of  this 
kind  about  the  Ausgleich.  On  this  account  it  may  be 
allowable  to  enter  somewhat  more  deeply — so  far  as  an 
outsider  can — into  the  historical  bases  of  this  constitutional 
position  which  for  us  is  difficult  to  grasp. 


The  German  Imperial  constitution  is,  as  was  explained  in 
the  second  chapter,  the  outcome  of  a  national  movement 
towards  unity,  and  its  aim  is  consoUdation.  The  Austro- 
Hungarian  constitution  of  1867,  on  the  other  hand,  is  the 
outcome  of  a  national  process  of  partition.  Moreover,  the 
German  Imperial  constitution  was  essentially  a  result  of  the 
pressure  of  economic  forces,  whilst  the  Austro-Hungarian 
constitution  still  shows  practically  no  trace  of  the  economic 
character  of  this  age  of  intercommunication. 

In  order  to  inquire  into  the  origins  of  the  German  Imperial 
constitution  we  must  take  up  the  draft  constitution  of  the 
German  national  assembly  of  March  28,  1849,  and  learn 
from  it  the  aims  of  the  national  movement  of  that  date.  In 
this  old  draft  the  idea  of  economic  partnership  prevails 
along  with  the  conception  of  partnership  in  mihtary  and 
naval  power.  The  following  matters  were  transferred  to 
the  Imperial  authority  :  the  regulation  of  ocean  navigation, 
river  navigation,  railway  affairs,  inspection  of  high-roads, 
the  formation  of  a  customs  and  commercial  area,  joint 
taxes  on  production  and  consumption,  industrial  legislation, 
the  postal  system,  coinage,  weights  and  measures,  the 
banking  system,  the  rights  of  citizens,  sanitation,  civil  law, 
commercial  law,  law  of  exchange,  criminal  law.  The 
German  national  movement  was  quite  saturated  with 
economic  tendencies.  And  afterwards  the  Imperial  constitu- 
tion drawn  up  by  Bismarck  on  the  basis  of  the  Frankfurt 
draft  was  in  accordance  with  it.  Article  4  of  the  German 
Imperial  Constitution  is  a  more  precise  remodelling  of  the 


270  CENTRAL  EUROPE 

Frankfurt  aims,  and  adds  the  following  to  the  subjects 
mentioned  :  patents  for  invention,  protection  of  literary 
property,  protection  of  German  trade  abroad,  law  of  con- 
tracts. It  is  very  remarkable  that  in  this  Article  military 
affairs  and  the  navy  only  occupy  the  fourteenth  place. 
So  great  was  the  importance  attached  to  economic  claims  in 
drawing  up  the  constitution.  The  German  Empire,  which  is 
generally  regarded  abroad  as  a  purely  miUtary  State,  is  at 
least  equally  an  economic  State,  and  has  been  from  the  very 
first.  The  two  characteristics  mutually  permeate  it  and 
give  to  the  whole  its  firm  stabihty. 

In  contrast  to  this,  even  in  1867,  the  Austro-Hungarian 
Ausgleich  gave  no  sign  of  any  feeling  of  the  necessity  for  a 
closer  economic  unity,  and  was  entirely  dictated  by  the 
aspirations  of  the  Hungarians  to  separate  themselves  as 
much  as  possible  from  the  existing  unity  of  the  State  owing 
to  their  feeling  for  their  own  nationalist  and  political  State 
rights.  All  economic  questions  are  disposed  of  in  Section  2 
of  the  fundamental  law  under  matters  "  which  wiU  not 
indeed  be  jointly  managed  but  which  will  be  treated  accord- 
ing to  similar  principles  to  be  agreed  upon  from  time  to 
time."  The  Hst  of  matters  under  this  head  contains  only : 
commercial  affairs,  especially  tariff  legislation,  legislation 
about  indirect  taxes  which  are  in  close  connection  with 
industrial  production,  the  establishment  of  the  coinage 
system  and  the  gold  standard,  arrangements  with  respect 
to  Unes  of  railway  which  affect  the  interests  of  both  halves 
of  the  Empire  ;  the  estabUshment  of  a  military  organisation. 
That  is  all !  This  was  the  basis  on  which  treaties  were 
concluded,  not  laws  enacted  or  ordinances  issued. 

Thus  there  is  the  customs  and  commercial  treaty  of 
December  30,  1907,  between  Austria  and  Hungary,  which 
remains  vaUd  until  December  31,  1917.  It  covers  :  uniform 
customs  frontiers  without  intermediate  duties,  partnership 
in  foreign  commercial  treaties  until  notice  of  withdrawal  is 
given,  regulation  of  the  relations  of  courts  of  justice,  mutual 
inspection  of  the  customs  administration,  equality  of 
maritime  regulations,  agreement  concerning  river  navigation. 


CONSTITUTIONAL  PROBLEMS  271 

closer  connection  of  railway  administration,  partnership  in 
the  consular  system,  closer  connection  in  statistical  work,  like 
management  of  salt  and  tobacco,  equal  taxation  of  beer, 
brandy,  petroleum  and  sugar,  maintenance  of  the  system  of 
weights  and  measures,  equal  treatment  of  commercial 
travellers,  reciprocal  recognition  of  patents  and  trade  marks, 
regulation  of  the  traffic  between  the  separate  postal  admini- 
strations, recognition  of  joint-stock  companies,  insurance 
companies  and  so  on,  joint  procedure  for  the  protection  of 
the  vine,  establishment  of  a  court  of  arbitration  for  all  these 
questions. 

It  is  evident  how  much  more  is  included  in  the  actual 
treaty  than  was  assumed  in  the  few  Unes  in  the  fundamental 
law.  The  economic  State  has  won  for  itself  certain  oppor- 
tunities, but  with  what  effort,  and  the  whole  is  terminable 
on  notice  of  withdrawal !  These  economic  arrangements 
terminable  at  will,  lend  an  element  of  insecurity  to  the  whole 
industrial  economic  system  of  the  Danubian  Monarchy.  Since 
the  treaty  embod5dng  them  is  only  of  short  duration  it  renders 
impossible  the  conclusion  of  any  treaty  of  long  duration. 

Now  it  is  easy  enough  to  say,  from  the  point  of  view  of 
the  German  Empire,  that  the  Austrians  and  Hungarians 
must  put  their  treaties  on  a  permanent  footing  by  authorising 
their  Delegations  to  enact  economic  legislation  for  the 
whole  kingdom.  But  the  Hungarians  are  unwilling  to  take 
even  this  step,  because  it  seems  to  them  like  a  return  to 
the  old  position  of  inferiority  in  respect  to  Austria.  They 
are  well  aware  that  the  relation  here  described  has  serious 
defects,  but  what  can  they  do  in  order  to  arrive  at  a  complete 
Austro-Hungarian  economic  State  without  violating  the 
nationalism  of  their  fathers  and  their  heroes,  a  nationalism 
which  extends  also  into  economic  matters  ? 

We  for  our  part  can  merely  state  these  things,  for 
it  would  not  faciUtate  the  attainment  of  our  object  in. 
Mid-Europe  to  try  to  come  in  from  outside  with  pro- 
posals about  matters  which  are  essentially  of  a  purely 
Austro-Hungarian  character.  But  there  are  men  among  the 
Hungarians  and  Austrians  who  are  able  to  understand  the 


272  CENTRAL  EUROPE 

world's  economic  movement,  and  who  possess  that  inherited 
knowledge  about  treaty  and  Ausgleich  negotiations  which 
is  inherent  on  the  Danube.  These  men  will  seek  some 
way,  in  spite  of  opposing  clauses,  to  pave  the  way  for  a 
tradition  which  will  make  an  advantageous  and  much- 
needed  Central  European  economic  system  possible  for  all 
parties.     Where  there  is  a  wiU  there  is  a  way. 


These  last  explanations  have  brought  us  quite  near  to  the 
inmost  kernel  of  the  Mid-European  constitutional  problem, 
that  is  to  the  progressive  separation  of  the  national  State 
from  the  economic  State  and  from  the  military  State.  In 
order  to  grasp  this  fundamental  problem  our  explanation  of 
the  world-group  economic  areas  must  be  kept  in  mind. 
The  world-group  area  of  Mid-Europe  must  become  greater 
than  the  existing  dimensions  of  the  States  of  Germany, 
Austria  and  Hungary.  We  have  refrained,  by  reason  of 
the  circumstances  of  the  war,  from  naming  definite  neigh- 
bouring States,  and  have  only  worked  out  in  general  the 
conception  that  further  accessions  are  necessary.  And 
to  what  shaU  these  neighbouring  States  join  themselves  ? 
To  a  military  union  and  an  economic  union  !  Everything 
else  is  superfluous  and  hence  harmful.  They  ought  to  and 
must  retain  their  own  political  independence  in  aU  other 
matters.  Thus  it  is  important  so  to  cut  out  the  miHtary 
union  and  the  economic  union  from  the  remaining  multitude 
of  poUtical  activities  as  to  make  it  possible  to  join  with  them 
separately.  Here  we  shall  discuss  first  the  economic  union, 
or  if  people  prefer  to  call  it  so,  the  economic  State.  This 
State  is  bound  up  with  the  language  of  no  country  and  can 
tolerate  the  most  diverse  nationalities  and  rehgious  creeds 
within  its  borders.  No  Central  European  nationaUty,  not 
even  the  German,  is  in  itself  big  enough  for  a  world-group 
economic  State.  That  is  the  result  of  the  capitaUst  system 
of  interchange.  This  economic  State  has  its  customs 
frontiers  just  as  the  military  State  has  its  trench  defences. 
Within  these  frontiers  it  tries  to  establish  a  sphere  of  con- 


CONSTITUTIONAL  PROBLEMS  273 

tinually  active  exchange.  An  economic  Government  is 
required  for  this  which  is  directly  competent  for  one  part 
of  the  economic  laws  and  for  the  remaining  part  advises 
the  national  Governments.  Customs,  the  regulation  of 
syndicates,  export  organisations,  patent  law,  trade  marks, 
the  control  of  material  and  similar  matters  are  under  the 
direct  control  of  the  economic  State  Commercial  law, 
traffic  policy,  social  poUcy  and  many  other  things  belong  to 
its  indirect  sphere  of  activities.  But  this  economic  State, 
which  is  independent  of  nationaHty,  cannot  be  decided  in 
a  day,  it  must  go  on  growing  from  one  event  to  another. 
The  more  it  completes  itself  the  more  will  it  create  its  own 
organs  and  its  economic  parliamentary  system. 

When  we  use  the  expression  economic  parliamentary 
system  we  are  referring  to  a  development  far  ahead.  But 
we  do  this  in  order  to  come  to  an  understanding  in  regard 
to  scruples  about  the  Mid-European  plan  which  are  at 
present  making  themselves  heard  in  strongly  Liberal  and 
democratic  circles.  It  is  said  there  :  owing  to  the  position 
of  affairs  the  partnership  between  Germany  and  Austria- 
Hungary  cannot  come  into  existence  as  a  federal  State 
provided  with  a  parliament,  hence  this  otherwise  very 
desirable  event  means  a  real  loss  to  practical  parliamentary 
work  and  thus  to  active  citizenship.  Theoretically  con- 
sidered this  is  certainly  true.  For  if  such  important  depart- 
ments of  life  as  customs,  a  system  of  storage,  the  admini- 
stration of  war  debts,  the  regulation  of  syndicates,  maritime 
regulations,  etc.,  are  made  the  subjects  of  investigations 
by  a  Central  European  Commission  and  of  arrangements  by 
treaty,  the  final  assent  would  still,  it  is  true,  rest  with 
parliament,  but  it  is  indisputable  that  these  matters  will  be 
put  outside  the  field  of  practical  collaboration  even  more 
than  hitherto.  I  attach  importance  to  this  "  even  more 
than  hitherto,"  and  it  was  on  account  of  these  words  that 
I  previously  termed  the  whole  objection  theoretical.  For 
any  one  who  follows  carefully  the  progress  of  important 
economic  legislation  will  already  have  come  to  the  con- 
clusion that  often  parliament  a6  a  whole  has  but  little  share 


274  CENTRAL  EUROPE 

in  the  preliininary  work.  This  is  only  assigned  to  individual 
members  who  are  specially  interested  or  expert,  and  who 
on  account  of  these  qualifications  would  be  and  will  be 
consulted  whatever  the  method  of  preparation.  The  work 
of  the  parUamentary  majority — over  and  above  a  few 
changes  in  detail — Hes  in  the  final  vote  of  acceptance  or 
rejection.  This  results  from  the  nature  of  the  case,  for 
no  representative  of  the  people  can  be  acquainted  with  all 
the  individual  questions  of  economic  Ufe.  When  the  parlia- 
mentary system  was  formed  the  economic  duties  of  parUa- 
ment  were  immeasurably  simpler,  and  could  generally  be 
grasped  by  that  normal  understanding  which  may  be  pre- 
sumed in  every  deputy.  In  the  interval  economic  poUcy  has 
become  a  technical  matter,  much  more  so  than  foreign  policy. 
If  somewhat  more  of  it  than  hitherto  is  assigned  to  Com- 
missions and  Boards  of  experts  this  will  be  by  no  means 
merely  a  loss  to  the  parliamentary  system,  but  will  be  at 
the  same  time  a  certain  relief  in  that  it  takes  from  the  people's 
representative  something  of  the  technical  side  of  national 
economics  with  which  he,  strictly  speaking,  can  no  longer 
cope. 

*  *  ilf  *  *  :¥ 

Yet  after  all,  this  only  touches  upon  one  side  of  the 
matter.  It  is  the  professional  duty  of  the  deputy  to  see 
that  the  electoral  district  or  class  of  people  represented  by 
him  does  not  come  off  the  loser.  How  can  he  do  this  if  he 
does  not  get  a  sight  of  a  treaty  except  in  its  final  stage  ? 
The  answer  to  which  is  that  the  officials  whose  business  it 
is  to  choose  and  to  send  up  the  Mid-European  Commission 
members  and  experts,  must  be  attentive,  whenever  they 
are  considering  plans  of  expenditure,  to  the  criticism  of  the 
popular  assembly.  That  this  is  no  mere  figure  of  speech 
every  one  will  aver  who  is  in  a  position  to  know  about  the 
negotiations  of  the  budget  committee  of  the  German 
Reichstag.  Moreover  the  proposed  new  system  will  be 
submitted  to  the  judgment  of  the  popular  assembly.  But 
more  cannot  in  reality  be  attained.  Only  ask  indeed  what 
influence  the  individual  member  of  the  English  Parliament 


CONSTITUTIONAL  PROBLEMS  275 

has  upon  the  economic  poUcy  of  Greater  Britain !  The 
answer  may  reveal  strange  things  about  the  model  country 
of  the  parUamentary  system.  The  development  in  the 
important  relations  of  communications,  cor.^^^i,^:^'^  and 
labour  swallow  up  the  unorganised  private  motion  in  parfe^"'^  ^  J 
ment.  But  organised  motions  always  find  their  way  to  ^1^*  - 
effective  position.  ^  s 

This,  in  truth,  is  the  further  answer  which  must  be  given^ 
to  the  democratic-parhamentary  scruples  that  we  have^ 
mentioned :  the  Mid-European  economic  Commissions  must 
be  bound,  in  conformity  with  regulation  and  treaty,  to  hear 
and  record  the  representations  of  the  parties  interested  in 
all  the  countries  and  branches  of  industry  involved.  This  is 
less  than  an  Act  of  Parhament  in  one  way  and  more  in 
another  ;  less  because  it  at  most  only  deals  with  hearing, 
more  because  it  is  a  question  of  professional  experts.  In 
this  connection  it  must  be  established  from  the  outset  that 
employees  and  workpeople  must  be  regarded  in  all  matters 
involving  their  trade  as  parties  interested.  Something 
similar  may  be  estabUshed  for  the  consumer  in  regard  to 
articles  of  consumption.  Thus  in  a  natural  way  may  begin 
the  economic  parhament  of  the  future  which  we  need  more 
and  more  alongside  of  the  pohtical  national  assembly.  We 
need  it  for  economic  mobihsation,  for  the  system  of  storage, 
for  the  customs  tariff  and  for  much  besides. 

It  would  be  an  essential  mistake  to  set  to  work  now  to 
construct,  out  of  the  existing  popular  assembhes,  such  a 
Mid-European  parhament,  with  powers  of  final  decision  in 
economic  and  tariff  matters,  even  apart  from  the  Austro- 
Hungarian  constitutional  obstacles.  For  the  material  for 
dehberation  and  administration  must  first  be  in  existence 
before  a  dehberative  body  has  meaning ;  and  above  all, 
Mid-Europe,  the  new  economic  State,  needs  its  o^vn  future 
economic  constitution.  It  would  be  a  serious  blunder  to 
burden  it  with  a  Delegations  Parhament  in  which  all  the 
contentions  of  all  the  separate  parhaments  are  assembled  in 
a  mass.  Even  if  the  new  creation  makes  its  appearance  at 
first  as  formless,  shapeless  and  democratically  inadequate. 


276  CENTRAL  EUROPE 

yet  the  main  thing  truly  is  that  the  new  production  should 
not  be  accompanied  from  the  outset  by  a  smell  of  the  past. 
It  must  be  something  creative,  and  three  and  more  nations 
will  b©'*'  >^'  €  look-out  to  see  that  it  is  so. 

\ 


nissible  to  express  what  has  hitherto  been  stated 

I    a    somewhat    more    palpable    form.     Let    us 

t  in  ten  years'  time,  or  it  may  be  even  longer, 

ue  and  visit  the  Chairman  or  Deputy  Chairman 

-., .       iange  !)  of  the  Mid-European  Economic  Com- 

,     ^e  will  show  me  his  fine  new  building,  and  say  : 

:ame  we  thought  we  should  have  nothing  to 

. it  is  growing  up  on  all  sides!     For  so  long 

as  no  one  considers  Mid-Europe  in  an  ofiicial  capacity, 
Mid-Europe  is  only  an  idea.  But  from  the  day  when  an 
office  is  provided  the  first  ceU  of  a  new  brain  exists,  the  first 
machine  of  a  new  factory.  So  long  as  treaties  are  only 
concluded,  without  the  provision  of  any  location  for  the 
administration,  there  is  nobody  in  evidence  who  advocates 
from  his  heart  the  cause  on  account  of  which  the  treaties 
were  made,  but  each  contracting  party  to  the  treaty  is  only 
the  agent  of  his  State  or  of  the  party  in  which  his  interests 
are  concerned.  That,"  as  the  shrewd  old  gentleman 
remarked,  "  we  have  gone  through  here  quite  sufficiently. 
People  come  to  us  from  aU  sides,  from  Hungary,  from  Graz, 
from  Mannheim,  from  Altona,  also  from  .  .  .  and  from 
.  .  Each  one  wants  something  for  himself,  makes 
complaints  on  his  own  account,  wants  a  special  raisin  out  of 
the  big  cake,  but  we,  in  contrast  to  him,  look  after  the 
general  interests  in  a  hundred  ways.  Even  the  great 
amount  of  detail  we  have  to  concern  ourselves  with  obhges 
us  to  think  over  the  general  nature  of  Mid-Europe  care- 
fully, even  to  the  last  hole  and  corner.  Thus  our  con- 
ception of  it  grows  with  and  out  of  our  work.  That  in 
itself  forms  the  unity  between  us  and  our  colleagues  from 
over  there.     Little  clouds  and  sun-spots  appeau:,  but  in  the 


CONSTITUTIONAL  PROBLEMS  277 

main  they  signify  but  little,  for  our  life's  ideal  is  greater 
than  us  all.  Things  here  are  not  as  they  were  formerly  in 
the  Eschersheimer  Gasse  at  Frankfurt-on-Main,  for  we  have 
ten  times  more  to  do  than  those  gentlemen,  and  the  world 
economic  system  is  daily  throwing  fresh  material  at  our 
feet."  Thus  he  spoke,  and  we  went  along  the  edge  of 
the  hill  and  saw  the  town  and  the  bridge.  I  asked  :  "  How 
do  things  go  with  the  Tzechs  and  the  other  non-German 
Mid-Europeans  ?  "  "  Oh,"  said  he,  "  at  first  intercourse 
did  not  come  to  much,  for  we  speak  German  in  the  office  ; 
but  in  the  end  it  became  much  too  serious  for  the  Tzech 
farmers  and  business  people  not  to  be  in  touch  with  us. 
And  I  can  put  in  a  few  Tzech  words  here  and  there ;  that 
often  goes  a  long  way  to  make  the  German  easier  to  under- 
stand. We  purposely  make  no  question  of  principle  out 
of  these  things  and  don't  aUow  ourselves  to  be  forced 
into  taking  sides  within  Mid-Europe  The  Germans  at 
first  thought  rather  ill  of  us  on  this  account,  but  they  too 
see  well  enough  that  a  world-group  area  can  only  be  managed 
with  a  certain  measure  of  common  humanity.  It  is  the 
tone  that  makes  the  music.  And  besides,  what  the  people 
who  come  to  us  do  outside  in  poHtics  does  not  concern 
us,  for  we  represent  here  nothing  but  economic  ideas.  But 
it  seems  to  me  that  this  in  itself  has  a  soothing  effect  poUti- 
cally."  "  And  how  is  it  with  the  new  members  of  the 
union  and  their  special  rights  ?  "  He  knew  whom  I  meant, 
I  cannot  say  at  present.  His  answer  was  :  "It  always  takes 
a  little  time  to  get  accustomed  to  things,  but  since  we  ask 
nothing  beyond  what  is  actually  necessary,  and  since  the 
advantages  of  inclusion  within  our  great  market  area  are 
obvious,  all  that  remains  is  only  discussions  about  putting 
things  into  effect.  Come,  I  will  show  you  the  hall  with  the 
statistics  on  the  walls  !  Here  I  always  gladly  leave  strange 
visitors  to  wait  awhile.  They  see  there  the  pictures  of  aU 
the  aUied  sovereigns  and  then  wall  blackboards  full  of 
imports,  exports,  production,  consumption,  so  much  that 
the  size  of  Mid-Europe  is  impressed  upon  them  once  more 
really  effectively,  before  they  enter  the  room  to  see  me  or 


278  CENTRAL  EUROPE 

my    colleague.  ..."     Thus    should    I    gladly    hear    him 
speaking  if  I  dreamt  of  the  future  of  our  scheme. 


But  how  will  it  be  with  the  military  State  ?  It  too  must 
go  beyond  the  frontiers  of  the  national  States,  and  must 
include  the  trench-protected  community.  People  have 
coined  for  it  the  term  "  mihtary  convention "  without 
any  one  having  so  far  stated  exactly  all  that  can  and  must 
be  agreed  upon.  I  myself,  as  a  civilian,  am  not  in  a  position 
to  do  this,  and  if  I  could  make  such  a  statement  I  should 
perhaps  think  it  more  useful  to  communicate  it  only  to 
those  most  concerned.  We  Central  European  citizens  only 
ask  to  be  secure  in  the  mihtary  sense  for  a  further  period 
of  the  world's  history,  and  in  spite  of  great  financial  burdens 
we  shall  be  ready  to  sanction  in  our  State  ParUaments 
what  is  absolutely  necessary  for  this.  Probably  this  will 
no  longer  be  a  party  question  after  the  war,  but  a  general 
concern  of  the  nation.  But  all  the  experiences  of  this 
immense  war  must  here  be  used  to  the  full  in  order  to 
complete  and  simphfy  the  machinery.  In  this  connection 
it  will  be  impossible  to  avoid  introducing  afresh  the  question 
of  the  constitution  of  the  army.  We  intend  only  to  bring 
up  here  the  chief  points  of  the  two  constitutions. 

In  the  German  Empire  the  whole  of  Prussian  mihtary 
legislation  was  placed  in  the  sphere  of  the  federal  union  by 
Article  6i  of  the  Constitution,  and  then  in  1874  the  so-called 
great  mihtary  law  was  issued,  to  which  later  numerous 
additions  and  accessory  laws  have  been  added.  The  unifor- 
mity is  complete  with  the  exception  of  special  provisions 
for  Bavaria  and  Wiirttemberg. 

As  far  as  Bavaria  is  concerned  the  treaty  of  November  23, 
1870,  determined,  in  consideration  of  the  sovereign  dignity  of 
Bavaria,  that  Bavaria  should  bear  exclusively  and  alone  the 
expenses  and  burdens  of  its  mihtary  affairs  (including  the 
maintenance  of  fortresses  within  its  territory  and  other 
fortifications).'  And  moreover  Bavaria  engaged  to  expend 
the  same  eimount  of  money  upon  its  contingent  as  was 


CONSTITUTIONAL  PROBLEMS  279 

decided  upon,  in  proportion  to  the  numerical  strength,  for 
the  remaining  parts  of  the  union.  The  Bavarian  army 
forms  a  part  of  the  German  federal  army,  which  is  complete 
in  itself  and  has  an  independent  administration  under  the 
miUtary  sovereignty  of  the  King  of  Bavaria  ;  but  which  in 
war  time,  and  indeed  from  the  beginning  of  mobilisation,  is 
imder  the  command  of  the  federal  commander-in-chief. 
Complete  uniformity  prevails  in  respect  to  organisation, 
formation,  instruction,  pay  and  instructions  for  mobilisation. 
The  federal  commander-in-chief  has  the  duty  and  the  right 
of  assuring  himself  by  inspection  as  to  the  uniformity  and 
the  completeness  of  the  army.  Since  that  time  growing 
tradition  has  modified  the  statement  relating  to  the  financial 
independence  of  the  Bavarian  army  so  that  the  expenses  of 
Bavarian  miUtary  affairs  are  in  fact  defrayed  by  the  Empire 
and  all  that  remains  is  a  process  of  mutual  liquidation  of 
accounts. 

The  military  convention  with  Wiirttemberg  secures  to  the 
Wiirttemberg  division  of  troops  its  own  colours  and  designa- 
tion. The  miUtary  oath  includes  king  and  federal  com- 
mander-in-chief alike.  Promotions  are  accorded  by  the 
king  with  the  consent  of  the  federal  commander-in-chief. 
The  Wiirttemberg  army  corps  remains  in  its  own  territory. 
Interchange  of  ofiicers  is  provided  for  and  inspections. 

These  German  Imperial  miHtary  agreements  do  not 
destroy  the  uniformity  of  the  army,  but  the  conditions  in 
Austria-Hungary  are  more  complicated  in  this  department 
too,  for  there  are  three  army  organisations  which  possess 
their  own  military  machinery,  viz.  :  the  joint  army,  the 
Austrian  Landwehr  and  the  Hungarian  Landwehr.  To 
understand  this  we  must  refer  again  to  the  fundamental 
law  of  1867.  There  the  joint  business  is  explained  as  : 
"  Military  affairs,  including  the  navy,  but  excluding  the 
actual  sanction  by  voting  of  the  contingent  of  recruits, 
legislation  relating  to  the  manner  and  method  of  dis- 
charging the  obligation  to  serve  in  the  army,  regulations 
in  regard  to  the  removal  and  maintenance  of  the  army, 
and  further  regulation  of  the  civil  relations  and  of  those 


28o  CENTRAL  EUROPE 

rights  and  obligations  of  members  of  the  army  which  do 
not  refer  to  miUtary  service."  This  somewhat  difficult 
sentence  signifies  roughly  that  the  formation  of  the  army 
is  the  business  of  the  single  States  whilst  the  leadership 
of  the  army  is  a  joint  affair.  In  regard  to  the  formation 
of  the  army  the  "  estabUshment  of  the  miUtary  organisation  " 
is  placed  in  the  fundamental  law  among  the  objects  about 
which  from  time  to  time  settlements  shall  be  made.  Thus, 
here  too,  in  respect  to  the  army  we  find  that  feature  of  termin- 
abihty  akeady  known  to  us  !  The  lev5ang  and  division  of  the 
expenses  of  the  joint  army  is  subject  to  the  same  condition. 

Hungary,  notwithstanding  its  share  in  the  joint  army,  is 
not  willing  to  dispense  with  a  special,  purely  Hungarian 
army  system.  Hence  in  the  agreement  of  1867  it  preserved 
for  itself  the  right  to  supplement  the  Hungarian  army  proper 
from  time  to  time,  and  formed  or  maintained  with  its  special 
system  of  recruiting  and  administration  its  Hungarian 
Landwehr  (Honved).  The  result  of  this  was  to  bring  into 
existence  a  special  Austrian  Landwehr,  on  grounds  of 
equality.  Before  the  outbreak  of  war  the  position  of  the 
forces  in  peace  time  was  numerically  that  the  joint  army 
amounted  to  339,000  men,  the  Austrian  Landwehr,  49,000, 
the  Hungarian  Landwehr,  36,000.  A  memorial  which  we 
have  before  us  estimates  the  extra  expense  of  this  triple 
system  at  75  miUion  kronen  a  year.  Each  of  the  two 
States  has  two  separate  organisations  for  recruitment, 
whence  it  follows  that  two  different  systems  of  recruiting 
are  carried  on  in  the  same  territory. 

If  we  look  forward,  in  this  case  too,  beyond  the  present  to 
a  somewhat  distant  future  we  see  that  a  Mid-European 
army  statute  will  be  necessary,  which  will  distinguish 
precisely  between  the  general  miUtary  obUgations  of  the 
aUied  States,  which  must  be  the  same  for  all  who  share  in 
the  trench-protected  partnership,  and  the  special  rights  and 
sovereignty  of  the  single  States.  The  same  appHes  to  the 
navy.  The  navy  is  a  joint  business  in  both  Empires  and 
will  be  paid  for  out  of  the  common  treasury. 


CONSTITUTIONAL  PROBLEMS  281 

The  military  partnership  results  from  the  conception  of 
the  world-group  economic  area.  If  such  an  area  is  to  be 
estabUshed  it  must  be  a  self-contained  body  for  purposes 
of  defence.  This  must  find  constitutional  expression  after 
the  war  just  as  much  in  Greater  Britain  as  in  Mid-Europe. 
And  this  involves  for  all  the  States  and  sections  of  States 
concerned  a  certain  limitation  of  their  particular  poUtical 
sphere,  for  they  must  renounce  the  ability  to  wage  a  special 
war  for  themselves  alone.  But  at  the  same  time  the  limita- 
tion contains  a  powerful  safeguard  for  their  existence,  for 
they  can  no  longer  be  attacked  alone.  Any  one  who  belongs 
to  the  miUtary  union  is  guaranteed  by  it  in  so  far  as  this 
is  within  the  power  of  the  joint  army. 

We  have  previously  compared  this  event,  rendered 
necessary  by  the  course  of  history,  with  the  formation  of 
industrial  syndicates.  When  a  single  industrial  undertaking 
joins  a  syndicate  it  gives  up  something  of  its  independence, 
but  it  strengthens  its  power  of  existence  in  so  doing.  The 
weighing  of  the  advantages  and  disadvantages  of  this 
system  has  given  very  serious  and  earnest  occupation  to 
many  large  and  small  industrial  and  Government  under- 
takings, but  the  final  result  is  an  almost  universal  victory 
for  the  syndicate  idea.  Owing  to  the  position  of  the  Central 
European  States  between  East  and  West  nothing  else  is  left 
them  in  the  long  run  but  to  strengthen  themselves  mutually 
through  association. 

This  is  conclusive  also  for  the  neighbouring  small  neutral 
States. 

*  *  He  *  *  * 

The  effects  of  the  economic  union  and  the  military  union 
on  the  conduct  and  management  of  foreign  policy  are  of 
course  far-reaching,  and  involve  many  material  difficulties, 
especially  in  regard  to  constitutional  technicaHties.  We 
must  say  something  on  this  point,  but  we  reaUse  that  in 
this  matter  Uttle  can  be  done  by  formulation,  but  that 
things  will  only  be  cleared  up  by  actual  joint  work  and 
tradition. 

A    complete    partnership    exists    between    Austria    and 


282  CENTRAL  EUROPE 

Hungary  in  the  conduct  of  foreign  policy.  The  funda- 
mental law  says  on  this  point :  "  Foreign  affairs  are  in 
common,  including  diplomatic  and  commercial  representa- 
tion in  foreign  countries,  as  well  as  arrangements  that  may 
be  necessary  in  reference  to  international  treaties,  whereby 
however  the  ratification  of  the  international  treaties,  in  so 
far  as  this  is  constitutionally  necessary,  is  reserved  to  the 
representative  bodies  of  the  two  halves  of  the  Empire  (to 
the  Reichsrat  and  to  the  Hungarian  Reichstag)."  Thus 
whereas  the  two  halves  of  the  Empire  have  separate 
Ministries  in  other  cases,  they  have  a  joint  Minister  for 
Foreign  Affairs,  but  he  is  responsible  to  two  independent 
national  representative  assemblies.  This  Minister  is  selected 
in  course  of  time  both  from  Austria  and  Hungary.  The 
present  holder  of  the  office  is  a  Hungarian.  It  is  obvious 
that  the  system,  looked  at  theoretically,  may  lead  to 
mischievous  disputes,  but  in  practice  it  has  not  worked 
badly,  for  which  the  eminent  personality  of  the  Austrian 
Emperor  is  especially  to  be  thanked. 

In  the  German  Empire  the  conduct  of  foreign  affairs  is 
the  business  of  the  Bundesrat  and  is  represented  by  the 
Imperial  Chancellor.  But  in  order  to  secure  a  share  in  de- 
termining foreign  policy  to  the  small  kingdoms  in  particular 
which  belong  to  the  German  Empire,  a  committee  to  deal  with 
foreign  affairs  has  been  formed  in  the  Bundesrat,  under 
Bavarian  presidency,  of  plenipotentiaries  from  Bavaria, 
Saxony,  Wiirttemberg,  and  of  the  representatives  of  two 
other  federated  States.  This  committee  has  actually  met 
only  on  quite  rare  occasions,  but  its  existence  serves  as 
security  against  one-sided  Prussian  action.  Here  too  the 
reality  has  worked  more  simply  than  the  theory  in  con- 
stitutional law.  In  reality  the  Foreign  Office,  dependent  on 
the  Imperial  Chancellor,  manages  the  foreign  relations  and 
submits,  in  its  pubhc  acts,  to  the  judgment  of  the  Bundesrat 
and  Reichstag. 

In  both  Empires  accordingly  the  principle  of  uniform 
conduct  of  foreign  business  has  prevailed  of  itself.  The 
problem  of  how  the  will  of  the  people  ought  to  obtain 


CONSTITUTIONAL  PROBLEMS  283 

expression  in  foreign  politics  is  incompletely  solved  in  both 
cases,  but  the  same  applies  to  all  the  written  and  unwritten 
constitutions  of  every  nation.  It  is  technically  impossible 
to  make  the  representatives  of  the  people  accessories  to  all 
international  relations  which  are  still  in  an  undetermined 
position.  Some  things  may  be  communicated  in  parUa- 
mentary  committees,  which  with  us  is  indeed  happening  to 
an  increasing  extent,  but  the  choice  of  what  information  to 
communicate  still  rests  with  those  who  are  conducting 
affairs.  Here  there  is  a  deficiency  in  the  democratic  political 
system  as  such  which  cannot  be  supplied  by  conferring  on 
the  people's  representatives  the  duty  of  passing  resolutions 
in  regard  to  war  and  peace  or  by  demanding  the  publication 
of  all  secret  treaties.  In  August  1914  we  have  seen  that 
nothing  would  have  come  about  differently  even  if  that 
national  right  had  been  recognised  in  the  text  of  the  Con- 
stitution. The  voting  of  war  credits  and  of  war-time  econo- 
mic laws  is  in  reality  the  same  as  a  parUamentary  vote  on  the 
war  itself,  but  aU  that  results  at  a  given  moment  within  the 
already  existing  tension  of  the  war  is,  strictly  speaking,  an 
act  in  the  war.  What  saves  the  nations  from  rash  declara- 
tions of  war  is  the  knowledge  possessed  by  all  Governments 
that  in  our  day  no  war  can  be  carried  on  without  the  sincere 
concurrence  of  the  great  majority  of  the  population. 
Democracy  has  its  say  in  fact  but  without  formulation. 
And  it  is  the  same  with  the  treaties.  Certainly  it  would  be 
better  if  yet  more  treaties  were  made  pubhc,  and  if  thus  the 
nations  themselves  were  made  guarantors  for  them.  But 
there  would  still  be  need  for  some  confidential  archives, 
as  in  the  management  of  every  great  business.  The  conduct 
of  foreign  policy,  that  foremost  and  most  difficult  and 
responsible  task  of  statesmen,  remains  essentially  a  confi- 
dential matter.  This  is  a  somewhat  painful  fact  for  all 
citizens,  since  they  must  pay  for  the  mistakes  of  the  Foreign 
Office  with  their  lives  and  money,  but  it  cannot  be  altered. 
All  constitutional  definitions  in  this  supreme  matter  are 
hardly  more  than  attempts  at  control. 


284  CENTRAL  EUROPE 

The  significance  of  this  for  Mid-Europe  is,  however,  that 
it  will  be  of  but  little  use  for  any  one  to  think  out  a  model 
statute  for  the  joint  conduct  of  foreign  pohcy.  The  attempt 
may  be  made,  but  the  officials  of  the  aUied  Empires  and 
States  will  put  this  paper  amongst  their  many  other  docu- 
ments, and  will  only  produce  it  in  individual  cases  when  it 
suits  them.  Moreover,  foreign  policy  is  too  diverse  to  be 
managed  according  to  a  general  scheme  worked  out  before- 
hand. We  see  this  now  in  the  war  :  people  work  together 
in  Vienna  and  Berlin,  dispute,  grow  irritated,  and  come  to 
an  agreement  and  try  to  get  over  misunderstandings  by  a 
sense  of  duty  and  by  goodwill.  The  duaUsm  is  there  but 
is  no  absolute  hindrance.  So  far  as  we  can  see  we  shall  not 
get  out  of  this  situation  in  principle  within  any  measurable 
space  of  time,  but  we  shall  mutually  come  to  work  better 
and  better  with  one  another.  There  will  be  no  change  in 
the  Constitution,  but  here  too  a  tradition  will  grow  up. 

Any  one  who  wanted  to  construct  things  of  this  sort  out 
of  hand  without  recognition  of  realities  might  well  demand 
a  single  Foreign  Office  for  Mid-Europe,  just  as  there  is  a 
single  Minister  for  Austria  and  Hungary.  But  this  sugges- 
tion overlooks  the  fact  that  Austria  and  Hungary  have  the 
same  sovereign.  Without  this  personal  union  the  single 
Minister  for  Foreign  Affairs  could  hardly  exist,  for  the  unity 
of  the  source  of  the  orders  would  be  lacking.  If  Mid-Europe 
were  a  republic  many  other  things  might  perhaps  be  different, 
but  it  suffices  to  express  this  proposition  to  be  conscious  of 
its  unhistorical  character.  Moreover  the,  in  itself,  natural 
idea  of  a  single  Ministry  of  Foreign  Affairs  cannot  be  thought 
out  at  all  seriously  so  long  as  the  mutual  relations  between 
the  allied  Empires  are  themselves  foreign  poUtics.  The 
treaty  system  with  joint  treaty  organs  as  we  have  expounded 
it,  supposes  contracting  parties  on  both  sides.  The  new 
feature  is  thus  not  a  new  Foreign  Ofiice  for  Mid-Europe, 
but  a  growing  stabiHty  in  joint  work  and  adjustments 
between  the  two  Offices  already  in  existence. 

In  this  connection  many  other  matters  come  into  considera- 
tion alongside  of  the  joint  economic  and  commercial  com- 


CONSTITUTIONAL  PROBLEMS  285 

mittees  already  discussed.  Each  of  the  two  Empires  has  its 
own  complete  system  of  embassies  and  consulates.  This 
must  continue  so  in  the  main,  but  here,  too,  closer  approach 
and  joint  representation  is  possible.  In  the  consulate 
system  especially,  where  even  as  it  is  mutual  representation 
is  used  in  the  most  diverse  places,  a  single  representative 
for  small  stations  should  be  preferred  on  principle.  Mid- 
Europeans  abroad  must  have  feeHngs  of  fellowship.  It 
would  be  very  desirable  to  organise  jointly  a  place  at  home 
for  the  interchange  of  consular  reports.  And  as  regards  the 
embassies,  there  can  hardly  be  any  discussion  of  a  joint 
organisation  at  the  present  stage  of  affairs,  but  it  appears 
conceivable  that  all  general  letters  and  communications 
might  be  interchanged  without  further  ceremony. 

It  would  certainly  be  going  too  far  to  say  that  in  future 
only  joint  treaties  must  be  concluded ;  for  the  subjects  of 
many  treaties  in  fact  concern  only  one  or  the  other  State. 
For  example,  the  agreements  about  the  navigation  on  the 
Danube  down  to  the  Black  Sea  are  the  business  of  Austria- 
Hungary,  whilst  a  navigation  treaty  between  Germany  and 
Sweden  is  the  affair  of  the  German  Empire.  But  whenever 
both  Empires  are  concerned  in  the  same  matter,  the  attempt 
ought  to  be  made  on  principle  to  obtain  the  same  terms. 
This  must  be  desired  by  both  sides  ! 


And  this  brings  us  to  the  end  of  our  exposition.  We 
dedicate  it  to  the  statesmen  and  to  the  nations.  It  is  not 
necessary  to  smnmarise  the  contents  of  the  book,  for  the 
reader  will  have  them  in  mind.  He  will,  we  hope,  have 
grasped  one  point  as  certain,  that  the  Central  European 
Empires  cannot  let  themselves  be  pushed  thoughtlessly  into 
this  affair,  but  must  take  a  fundamental  resolution  as  to 
whether  they  desire  Mid-Europe  or  not.  If  they  do  not 
desire  it  they  will  go  to  the  Peace  Conference  in  quite  a 
different  spirit  from  that  which  will  inspire  them  if  they 
do  desire  it — every  question  of  the  war  will  have  a  different 
conclusion  so  soon  as  the  great  preliminary  question  is 


286  CENTRAL  EUROPE 

answered.  Our  future  German  Imperial  policy  will  be  quite 
different  in  one  case  from  what  it  will  be  in  the  other. 
And  it  is  the  same  with  Austria-Hungary.  Only  think  of 
Poland,  the  position  in  the  Balkans,  Turkey,  the  Mediter- 
ranean, the  commercial  settlements  in  the  treaty  of  peace ; 
everything  depends  on  the  Mid-European  decision. 

The  resolution  to  desire  Mid-Europe  is  an  important  step 
for  all  the  States  affected  and  one  with  momentous  conse- 
quences. Hence  each  State  will  consider  carefully  and 
unreservedly  all  the  relevant  possibilities.  We  acknowledge 
that  this  is  not  easy,  and  especially  for  Hungary.  Perhaps 
Hungary  has  to  bear  the  heaviest  burden  of  responsibiUty 
since  now  for  the  first  time  Graf  Andrassy's  policy  of  1879 
must  be  advanced  to  a  national  conclusion.  Hungary,  as  a 
non-German  State,  has  in  its  hands  a  portion  of  the  future 
fate  of  the  German  nation.  For  if  Hungary  rejects  the 
idea  of  Mid-Europe  decisively  it  will  be  hardly  possible  for 
this  idea  to  be  realised.  The  Hungarians  understand  this, 
and  are  preparing  themselves  to  make  a  decision  of  primary 
importance  in  international  affairs.  If  they  do  not  decide 
in  the  affirmative  then  for  them  and  for  us  a  fateful  moment 
has  gone  by.  But  the  Austrian  Emperor  too,  in  consultation 
with  his  successors,  will  weigh  the  arguments  for  and  against 
Mid-Europe,  and  with  a  wisdom  ripened  by  a  wonderfully 
eventful  life,  will  know  how  to  distinguish  what  is  transitory 
from  what  is  permanent.  He  knew  the  old  German  Con- 
federation, lived  before  Bismarck  and  survives  him,  and  his 
last  will  and  testament  will  be  sacred  to  the  nations.  He  will 
let  the  teaching  of  this  war  make  itself  heard  in  his  decision. 
And  the  Austrian  people  will  ponder  over  the  future  with 
him  from  the  point  of  view  of  general  international  develop- 
ment, and  will  wish  to  establish  the  basis  of  a  new  and 
safer  period  of  evolution  for  themselves  and  their  children. 
In  like  manner  the  German  Emperor  and  his  people  will  see 
that  they  too  are  faced  by  a  decision  which  must  involve  a  for- 
getting of  much  that  is  old  and  an  acceptance  of  much  that 
is  new.  The  Nibelungen  faith  of  the  Emperor  Wilhelm  II 
shall  be  raised  to  the  formation  of  a  State.    Ancient  disputes 


CONSTITUTIONAL  PROBLEMS  287 

about  development,  for  us  already  settled,  must  begin  afresh 
in  this  connection.  But  does  not  this  great  war  say  to  us 
all  that  we  cannot  remain  where  we  are  ?  We  shall  emerge 
from  it  other  than  what  we  were  when  we  entered  upon  it. 
We  shall  emerge  from  the  war  as  Mid-Europeans. 


It  was  in  April  that  I  conceived  the  plan  of  this  book.  At 
that  time  fighting  was  still  going  on  in  the  Carpathians. 
Our  sons  and  sons-in-law  were  defending  Hungary  and 
Austria,  just  as  previously  Austrians  and  Hungarians  had 
sustained  for  us  the  Russian  impact.  In  the  interval  many 
loyal  children  of  Central  Europe  have  been  carried  off  by 
death,  or  wounded,  many  good  and  noble  men  who  had 
their  hfe  before  them.  But  they  did  not  die  in  vain,  for 
our  joint  army  pressed  back  the  enemy  before  it,  freed 
Galicia,  and  released  Poland  from  a  Russian  jurisdiction  of 
a  hundred  years'  duration.  The  advance  has  lasted  from 
May  onwards.  This  work  has  grown  amidst  the  news  of 
this,  the  greatest  victorious  attack  in  the  world's  history. 
It  is  not  to  be  regarded  as  a  speculation  which  might  have 
been  framed  at  any  moment ;  on  the  contrary  it  has  taken  to 
itself  flesh  and  blood  out  of  the  war.  Thus  will  it  be  under- 
stood by  those  who  have  become  different  during  the  war 
from  what  they  were  previously. 

What  ought  to  be  our  profit  from  the  war  ?  For  what 
ought  our  dead  to  have  died  ?  To  the  end  that  we  should 
part  from  one  another  again  the  day  after  the  war  and  act 
as  though  we  had  never  known  one  another  ?  That  would 
be  to  squander  the  noblest  spiritual  good. 

Mid-Europe  is  the  fruit  of  war.  We  have  sat  together  in 
the  war's  economic  prison,  we  have  fought  together,  we 
are  determined  to  live  together ! 


CHAPTER  IX 
STATISTICAL  AND  HISTORICAL 

In  the  text  of  this  book  hitherto,  we  have  only  used  figures 
and  historical  data  very  sparingly,  for  the  benefit  of  those 
readers  who  want  to  be  spared  the  apparatus  of  knowledge. 
But  fortunately  these  are  not  the  only  type  of  reader,  and 
many  of  the  statements  and  remarks  in  the  text  can  only 
be  properly  illustrated  and  secure  the  desired  demonstrative 
force  by  means  of  figures  and  numbers.  Hence  in  the 
following  section  we  shall  gather  together  information  and 
data,  following  the  course  of  the  previous  chapters. 

The  statistical  material  is  obtained  almost  entirely  from 
the  statistical  year  books  for  Germany,  Austria  and  Hungary. 
To  these  must  be  added  Hiibner's  geographical  and  statistical 
tables  and  Hickmann's  pocket  atlas  of  Austria-Hungary. 
Dr.  Pistov's  book.  Die  Osterreichisch-ungarische  Volks- 
wirthschaft  came  out,  pubUshed  by  the  same  publisher,  just 
as  this  book  was  being  completed,  and  I  was  able  to  make 
use  of  it  in  a  few  places.  For  the  compiling  of  the  historical 
tables  under  Chapter  II  reference  was  made  to  the  historical 
summaries  in  Perthes'  Geschichts-atlas.  Guttentag's  edition 
was  used  for  the  constitution  of  the  German  Empire  ;  and 
for  the  fundamental  law  of  the  Austro-Hungarian  State, 
Giegl's  edition  (Manz,  Vienna).  The  remaining  general 
literature  is  given  in  Section  X.  We  may  mention  the 
following  later  pamphlets  referring  to  the  same  subject : 

Phihppovich,  Professor,  Geh.  Hofrat,  member  of  the 
Austrian  Herrenhaus :  Ein  Wirtschafts  und  Zollverband 
zwischen  Deutschland   und  Osterreich-Ungarn,  Leipzig,  1915. 

Losch,   Geh.   Finanzrat :    Der  miitel  europdische   Wirth- 

schaftsblock  und  das  Schicksal  Belgiens,  Leipzig,  1914. 

288 


STATISTICAL  AND  HISTORICAL  289 

Munin  :  Osterreich  nach  dem  Kriege,  Forderungen  eines 
aktiven  ofterreichischen  Politikers,  Jena,  1915. 

Wolf,  Professor :  Ein  deutsch-osterreichisch-ungarischer 
ZoUverhand,  Leipzig,  1915. 


I.  Partnership  in  the  War  and  its  Results 

In  order  to  simplify  the  statistical  summaries,  round 
numbers  are  given  throughout.  Any  one  who  wishes  to 
know  the  exact  figures  must  refer  to  the  statistical  year 
books.  Germany  is  indicated  by  G.,  Austria  by  A., 
Hungary  by  H.,  Bosnia  by  B.  We  begin  with  general 
data  concerning  area  and  population  : 

The  area  is : 

G 541,000  qkm. 

A.-H.    .         .         .         .         .     676,000     „ 

1,217,000     „ 

According  to  the  census  of  1910  the  population  of  this 
area  is : 

G.  .         .         .     64.9  million  inhabitants 

A.-H.     .         .         .     51.4       „ 

116.3      „ 

But  in  the  interval  up  to  the  war  the  total  population  of 
the  Central  States  in  Mid-Europe  increased  to  something 
over  120  milHons.  Whether  during  the  homicidal  war  the 
total  population  will  have  increased  or  decreased  cannot  be 
said  at  the  present  moment.  Probably  there  will  be  an 
increase  of  females  and  a  decrease  of  males. 

The  effective  force  of  the  army  in  peace  time  was,  for 
1913-14 : 

G 800,000 

A.-H. 424,000 

1,224,000 

T 


290  CENTRAL  EUROPE 

The  Austro-Hungarian  army  consists,  under  peace  condi- 
tions, of  the  following  divisions  : 

Joint  army 340,000 

Austrian  Landwehr         .         .         .       48,000 
Hungarian  Landwehr      .         .         .       36,000 


424,000 

Army  horses  under  peace  conditions  : 

G 

.     160,000 

A.-H 

90,000 

250,000 

We  can  say  nothing  in  respect  to  the  numbers  of  the  two 
armies  during  the  war. 
The  navy  before  the  war  included  : 

G.  A.-H. 

Battleships     .         .       loi         .         .  30 

Guns      .         .         .     2100         .         .         910 

The  fleets  are  not  completely  comparable  owing  to  the 
difference  in  types 

The  Central  European  military  power  is  the  result  of  long 
years  of  development  and  is  closely  connected  with  the 
increase  in  population. 

Growth  of  population  (reckoned  according  to  the  present 
extent  of  the  country)  in  millions  of  inhabitants  : 


G. 

A. 

H. 

1850 

.      35.4 

17-5 

13.2 

1870 

.      40.8 

20.2 

— 

1890 

•     494 

23.7 

17-5 

I9I0 

.     64.9 

28.6 

20.9 

1.9 

The  earKer  information  for  Hungary  is  not  given  in  the 
Statistical  Year  Book.  The  figures  under  H.  1850,  which 
come  from  Hickmann,  are  in  any  case  correct.  At  that 
time  the  territory  of  the  later  German  Empire  had  a  popula- 


STATISTICAL  AND  HISTORICAL 


291 


tion  about  5  millions  in  excess  of  that  of  Austria-Hungary. 
This  was  not  yet  the  case  in  1800.  The  change  in  the 
respective  amounts  of  population  took  place  in  the  first 
half  of  the  previous  century. 

Alterations  in  population  during  the  last  century  : 


A.-H. 

G, 

(without  B.) 

1800 

.   21.0 

23.1 

+ 

2.1 

1850 

.  354 

30.7 

— 

4-7 

1900 

.  56.4 

454 

— 

II.O 

I9I0 

.  64.9 

49-5 

— 

154 

The  backwardness  of  Austria-Hungary  is  quite  obvious, 
and  depends  partly  on  the  relation  between  the  births  and 
deaths  and  partly  on  emigration. 


Excess  of  Births,  1911-12,  per  Thousand 

Bom  Died  Excess 

G.       .         .         .     28.3  15.6  12.7 

A.         .  .  .      31.5  22.0  9.5 

H.       .         .         .     35.0  25.1  9.9 

In  spite  of  its  smaller  number  of  births,  Germany  shows 
far  the  better  percentage  result.  In  the  German  Empire 
there  are  somewhat  too  few  births,  but  in  Austria,  and  still 
more  in  Hungary,  there  are  far  more  deaths  than  necessary. 

Emigration  Questions.  Emigration  is  at  present  of  Uttle 
importance  for  Germany,  it  is  rather  a  question  of  immigra- 
tion. In  Austria-Hungary  things  are  different.  The  over- 
seas emigration  amounted  to : 


1908  . 

.  192,000 

1909    . 

.  199,000 

I9I0  . 

.  277,000 

I9II  . 

.  187,000 

1912  . 

.  213,000 

These  figures  are  very  high !     In  addition  there  is  a 
constant  seasonal  emigration  across  the  land  frontiers. 


292  CENTRAL  EUROPE 

Comparison  of  the  increase  in  population  of  the  Great 
Powers  (according  to  Hickmann),  in  millions  : 


1800 

1900 

Increase 

European  Russia 

38.8 

111.3 

+  72.5 

United  States 

5.3 

77.1 

+  71-8 

Germany 

21.0 

56.4 

+  354 

Austria-Hungary  without  B 

23.1 

454 

+  22.3 

Great  Britain  . 

16.2 

41.6 

+  254 

France    . 

26.9 

390 

+ 12.1 

Italy 

18.1 

32.5 

+  14.4 

Spain 

11.5 

18.2 

+   6.7 

Belgium  . 

3.0 

6.9 

+   3-9 

Roumania 

2.7 

6.0 

+   3-3 

Portugal 

2.9 

5.1 

+   2.2 

The  Netherlands 

2.0 

51 

+    3.1 

Sweden  . 

. 

2.3 

51 

+    2.8 

173.8  449.7 

Unfortunately  I  cannot  continue  these  tables  up  to  the 
present  with  the  information  at  my  disposal,  since  the 
censuses  take  place  at  different  times  and  must  therefore 
be  converted,  and  because  the  exact  area  of  country  to 
which  Hickmann's  tables  refer  is  not  known  to  me  in  every 
case.  But  even  thus  continued  only  up  to  1900  the  juxta- 
position is  of  the  greatest  interest. 

The  sequence  among  the  European  Great  Powers  according 
to  this  manner  of  reckoning  was  : 

1800.     Russia,  France,  Austria-Hungary,  Germany,  Italy, 

Great  Britain. 
1900.     Russia,  Germany,  Austria-Hungary,  Great  Britain, 

France,  Italy. 

(For  a  comparison  of  the  great  World-States  with  colonial 
provinces  see  Section  V.) 

From  a  purely  statistical  point  of  view  European  pohcy 
is  frequently  nothing  but  a  realisation  in  poHtical  law  of 
the  above  shiftings  of  population.     But  the  figures  alone  are 


STATISTICAL  AND  HISTORICAL  293 

not  decisive,  as  is  shown  by  the  example  of  Russia.  Amount 
of  population  is  only  one  of  the  important  historical  properties 
of  nations. 


II.  Of  the  Previous  History  of  Central  Europe 

The  following  collection  of  historical  dates  is  only  intended 
to  remind  the  reader  of  individual  events  which  are  of 
importance  for  the  previous  history  of  Mid-Europe  : 

1211.     Saint   Elizabeth,    Germany's   most   popular   saint, 

comes  from  Hungary  into  Thiiringia. 
1273-1291.    Rudolf  I.  of  Hapsburg  founds  the  Austrian 

Monarchy,  defeats  Ottokar  of  Bohemia  in  1278  on 

the  Marchfeld. 
1314-1330.    Struggle   between   Friedrich   of   Austria    and 

Ludwig  of  Bavaria  for  the  Imperial  Crown. 
1348.     King  Karl  IV.  founds  the  first  German  University  in 

Prague. 

1409.  Emigration  of  the  German  and  PoUsh  students  from 
Prague.    Foundation  of  the  University  of  Leipzig. 

1410.  Battle  of  Tannenberg.  Jagello  of  Lithuania  and 
Poland. 

1415.  Friedrich  I.  of  Hohenzollem,  Burggraf  of  Niimberg, 
takes  over  the  Mark  Brandenburg. 

1419-36.    Hussite  wars. 

1438.  Albrecht  II.,  Duke  of  Austria,  as  Sigmund's  son-in- 
law,  becomes  also  King  of  Bohemia  and  Hungary. 

1440-70.  Friedrich  II.  of  Brandenburg  meikes  his  royal 
residence  at  Berlin. 

1457.  Mathias  Corvinus  is  elected  King  of  Htmgary,  Georg 
Podiebrad  is  elected  King  of  Bohemia. 

1466.  West  Prussia  becomes  PoUsh,  East  Prussia  a  Polish 
fief. 

1519-56.  Emperor  Karl  V.,  world-embracing  empire  on  an 
Austro-Spanish  basis. 

1525.     The  Duchy  of  Prussia. 


294  CENTRAL  EUROPE 

1526.  Battle  of  Mohkcs  against  the  Turks.  Ferdinand  of 
Austria,  the  brother  of  Karl  V.,  becomes  King  of 
Bohemia,  Moravia,  Silesia  and  Hungary.  From 
henceforward  the  Austro-Hungarian  Monarchy 
exists. 

1521-38.     Karl  V.'s  ItaUan  wars. 

1529.    Vienna  besieged  by  the  Turks. 

1539.     Protestant  Reformation  in  Brandenburg. 

1555.  Rehgious  Peace  of  Augsberg ;  cuius  regio  eius 
religio. 

1556.  Abdication  of  Karl  V.  Separation  between  the 
Austrian  and  Spanish  sections  of  the  World-Power. 

1576-1612.  Emperor  Rudolf  11. ;  the  Hungarian  Protes- 
tants revolt.     Counter-Reformation. 

1608-9.  Formation  of  the  Protestant  Union  and  the 
CathoHc  League. 

1609.  Disputed  succession  in  JiiHch  and  Cleve.  Branden- 
burg extends  itself  to  West  Germany. 

1618.     Prussia  faUs  to  Brandenburg. 

1618-48.     Thirty  Years  War. 

1620.  Battle  of  the  White  HiU.  Break  up  of  Protestantism 
in  Bohemia. 

1630-32.  Gustavus  Adolphus  of  Sweden  in  Germany, 
attempted  Baltic  Sea  Empire. 

1640-88.  Friedrich  Wilhelm  of  Brandenburg,  the  Great 
Elector,  the  true  founder  of  the  North  German 
power. 

1660.  Prussia  freed  from  PoUsh  suzerainty  at  the  Peace  of 
Ohva. 

1681.  Strasburg  becomes  French  ;  influence  of  France  on 
the  west. 

1683,  Vienna  besieged  by  the  Turks,  saved  by  the  PoHsh 
King  Johann  Sobieski. 

1697.  August  the  Strong,  Elector  of  Saxony,  becomes  King 
of  Poland. 

1699.  Peace  of  Carlowitz.  Prince  Eugene,  the  noble 
knight.    Siebenbiirgen  secured  by  Austria, 

I70I.     Prussia  becomes  a  kingdom, 


STATISTICAL  AND  HISTORICAL  295 

1714.    Peace  of  Rastadt ;   Emperor  Karl  VI.  receives  the 

Spanish  Netherlands,  Milan,  Sardinia,  Naples. 
1718.     Peace  of  Passarowitz  ;   Austria  receives  Croatia  and 

parts  of  Bosnia  and  Serbia  (lost  again  in  1739). 
1732.     Exiled  Salzburg  Protestants  are  received  in  Prussia. 
1713-38.     Pragmatic  sanction  ;  indivisibihty  of  the  Austrian 

States,  female  succession. 
1740-86.     King  Friedrich  II.  of  Prussia. 
1740-80.     Queen  Maria  Theresa  of  Austria, 
1740-42.     First  Silesian  War. 
1741-48.     War  of  the  Austrian  Succession. 
1744-5.     Second  Silesian  War. 

1745-1806.     The  House  of  Lorraine  on  the  Imperial  throne. 
1756-63.     Seven  Years  War.     Prussia  becomes  the  North 

German  Great  Power. 
1772.     First  Partition  of  Poland. 
1778-79.     War    of    the    Bavarian    Succession.     Peace    of 

Teschen.     Bavaria  receives  Kurpfalz. 
1792-97.     First  Coalition  War  against  France.     Agreement 

of  Pillnitz  between  Austria  and  Prussia. 
1793.     Second  Partition  of  Poland. 
1795.     Third   Partition   of   Poland.     Prussia   concludes   a 

separate  peace  with  France  at  Basle. 
1797.     Peace  of  Campo  Formio.     Austria  receives  Venice, 

Istria  and  Dalmatia. 
1798-1802.     Second  CoaUtion  War  against  France. 

1804.  Franz  II.  as  Hereditary  Emperor  of  Austria. 

1805.  Third  Coalition  War  without  Prussia.  Vienna  occu- 
pied by  the  French.  Battle  of  AusterUtz.  Peace  of 
Pressburg.     Itahan  and  Tyrolese  possessions  lost. 

1806.  Napoleon  establishes  the  Confederation  of  the  Rhine. 
Franz  II.  resigns  the  German  Imperial  crown. 

1806.  Prussia  defeated  at  Jena  and  Auerstadt,  Napoleon 
in  Berlin. 

1807.  Peace  of  Tilsit.  Prussia  reduced.  Poland  re-estab- 
lished. 

1809.  Austria  fights  without  Prussia  against  Napoleon. 
West  Galicia  to  Poland,  East  Galicia  to  Russia. 


296  CENTRAL  EUROPE 

1812.  The  great  army  of  Napoleon  advances  against  Russia. 
Prussia  and  Austria  with  France  against  Russia. 

1813.  Prussia  and  Austria  with  Russia  against  France. 
Battle  of  Leipzig. 

1815.  Vienna  Congress  ;  Act  of  the  German  Confederation  ; 
Austria  receives  MUan,  Venice,  Istria,  Dalmatia, 
Tyrol.  Prussia  receives  the  province  of  Saxony. 
Federal  Diet  at  Frankfurt-on-Main  under  Austrian 
presidency.     Poland  divided  again. 

1815-26.  Holy  Alliance ;  Prussia  and  Austria  under 
Russian  guidance.     Mettemich. 

1818-53.  Formation  of  the  German  Customs  Union  under 
Prussian  guidance. 

1830-31.     Polish  rising  put  down. 

1848-49.  Revolution  in  Berlin  and  Vienna.  Hungarian 
nationaUst  rising.  Emperor  Franz  Josef.  German 
Parliament  in  St.  Paul's  Church  at  Frankfurt-on- 
Main.  Archduke  Johann  of  Austria  as  Imperial 
administrator.  Friedrich  WUhelm  IV.  of  Prussia 
does  not  accept  the  Imperial  crown.  Re-establish- 
ment of  the  German  Confederation.  Hungary  sub- 
dued with  Russian  help. 

1850.     Prussia  humbles  herself  at  Olmiitz  before  Austria. 

1853-56.  Crimean  War ;  the  Western  Powers  against 
Russia.  Austria  takes  part  as  the  protecting  Power 
of  Roumania.  Prussia  remains  neutral.  Nicholas  I. 
dies.  Peace  of  Paris.  Russia  enters  the  mouth  of 
the  Danube. 

1859.    The  Kingdom  of  Roimiania. 

1861-88.     King  Wilhehn  I.  of  Prussia. 

1862-90.  Bismarck  as  Minister-President  and  Imperial 
Chancellor. 

1864.  Danish  War  carried  on  by  Austria  and  Prussia 
together. 

1866  Austrian,  Prussian  and  Italian  War ;  Battle  of 
Koniggratz ;  Venice  for  Italy,  North  German  Con- 
federation, Customs  Parliament,  Prussian  treaties 
with  South  German  States. 


STATISTICAL  AND  HISTORICAL  297 

1867.  Ausgleich  between  Austria  and  Hungary.  Franz 
Josef  has  himself  crowned  King  of  Hungary. 

1870-71.  Franco-German  War.  NeutraUty  of  Austria  and 
Russia.  Foundation  of  the  German  Empire,  corona- 
tion of  the  Emperor  at  Versailles.  Alsace-Lorraine 
as  the  Reichsland.     Imperial  constitution. 

1872.    Meeting  of  the  three  Emperors. 

1877-78.  Russo-Turkish  War.  BerUn  Congress.  Serbia, 
Roumania,  Montenegro  become  independent  of 
Turkey.  Bulgaria  becomes  a  suzerainty.  Bosnia 
and  Herzegovina  come  under  Austro-Hungarian 
administration.  Russia  receives  Bessarabia,  but 
resigns  part  of  Dobrudscha  to  Romnania. 

1879.  Treaty  of  alUance  between  Germany  and  Austria- 
Hungary  arranged  by  Bismarck  and  Count  Andrassy. 

1887.  Italy  joins  the  Dual  AUiance  (until  1915  !). 

1888.  Emperor  Friedrich  III. ;  beginning  of  the  reign  of 
Emperor  Wilhelm  11. 


III.  Creeds  and  Nationalities 

Central  Europe,  the  battle-ground  of  violent  reUgious 
disputes,  is  very  diversified  as  regards  its  reUgious  creeds. 
Austria  is  the  most  uniform  with  over  nine-tenths  CathoUcs. 

Summary  of  religious  creeds  in  1910,  in  millions  : 


G. 

A. 

H. 

CathoUcs     . 

23.8 

25.9 

12.9 

=  62.6 

Protestants 

40.0 

0.6 

4.0 

=  44.6 

Other  Christians  . 

0.3 

0.1 

O.I 

=     0.5 

Jews  . 

0.6 

1.3 

0.9 

=     2.8 

Eastern  Greek  Church 

— 

0.7 

30 

=  3.7 

Others 

0.2 

— 

=     0.2 

64.9      28.6      20.9         II44 

Bosnia  and  Herzegovina  are  not  included  in  this  summary. 
There  are  there  0.4  CathoUcs,   0.8  Orthodox  Serbs,   0.6 


298 


CENTRAL  EUROPE 


Mohammedans  and  a  quite  negligible  minority  of  Protestants 
and  Jews. 

Members  of  the  United  Church  subject  to  the  Pope  are 
counted  as  CathoHcs. 

Any  alteration  of  the  Central  European  land  frontiers 
that  is  at  all  possible  or  to  be  expected  at  the  conclusion  of 
peace,  except  in  regard  to  Kurland  or  Livland,  will  lead 
to  an  increase  in  the  number  of  Cathohcs. 

Of  the  large  towns  of  over  200,000  inhabitants  the  follow- 
ing are  substantially  Protestant :  Berlin,  Hamburg,  Dresden, 
Leipzig,  Breslau  (very  mixed),  Frankfurt-on-Main,  Hanover, 
Niirnberg,  Chemnitz,  Magdeburg,  Bremen,  Charlottenburg, 
Kiel,  Konigsberg,  Neukolln,  Stettin,  Stuttgart ;  the  follow- 
ing are  substantially  CathoUc  :  Vienna,  Budapest,  Munich, 
Cologne,  Prague,  Diisseldorf,  Lemberg. 

There  are  strong  Jewish  minorities  (over  5  per  cent.)  in 
Vienna,  Budapest,  Prague,  Lemberg,  Frankfurt,  Breslau 
and  Berlin. 

Nationalities  in  the  German  Empire  in  thousands.  Unfor- 
tunately we  can  only  give  the  somewhat  out-of-date  figures 
for  1900,  since  neither  the  Statistical  Year  Book  nor  Hiibner's 
Tables  give  the  nationahty  census  for  1910.  Apparently  it 
is  not  yet  complete.  Owing  to  this  a  uniform  Central 
European  table  for  1910  cannot  be  made  up. 


Germans 

.     52,140  = 

925     per  thousand 

Poles      . 

3,090  = 

55       » 

French    . 

210  = 

3-7    ,. 

Masovians 

140  = 

2.5     >, 

Danes     . 

140  = 

2.5     „ 

Lithuanians 

no  = 

1.9    ,. 

Cassubians 

100  = 

1.8     „ 

Wends    . 

90  = 

1.7    » 

Those  otherwise  enumerated  are  immigrant  minorities. 
The  preponderance  of  Germans  is  obvious.  And  a  part  of 
the  1,260,000  "  aliens  to  the  Empire  "  are  born  Germans. 
The  Austrians  in  Germany  number  630,000,  the  Hungarians 
in  Germany  32,000. 


STATISTICAL  AND  HISTORICAL 


299 


Nationalities  in  Austria  in  thousands,  according  to  the 
census  of  1910 : 


Germans 

Bohemians,  Mora- 
vians, Slovaks 
Poles  . 
Ruthenians  . 
Slovenians   . 
Serbian  Croats 
Italians 
Roumanians 


9950  =  356  per  thousand 


6440  =  230 

4970  =  178 

3520  =  126 

1250  =    45 

781  =    28 

770  =    27 

270  =    10 


The  Germans  amount  to  rather  more  than  one-third. 
The  poUtical  effect  of  this  is  that  in  order  to  form  a  majority 
at  any  time  they  need  to  be  supplemented  by  another 
language  group,  even  if  they  are  entirely  united,  which 
seldom  happens.  Supposing  that  in  consequence  of  the 
war  GaHcia  is  separate'd  from  the  union  of  countries  repre- 
sented in  the  Reichsrat,  the  division  of  nationalities  will  be 
as  follows : 

NationaUties  in  Austria  without  Galicia  and  Bukowina 
(the  Ruthenian  question  remains  untouched  in  this  case)  : 

Germans  ....     9690^ 

Tzechs     . 
Slovenians 
Serbian  Croats 


Italians 

Poles 

Ruthenians 


6430 

1250 

780 

770 

260 

10/ 


^9500 


This  involves  a  German  majority  which  is  almost  as 
narrow  as  the  Magyar  majority  in  Himgary. 

NationaUties  in  Hungary,  in  thousands,  according  to  the 
census  of  1910 : 

Magyars     .         .     10,050  =  482  per  thousand 
Roumanians       .       2,950  =  141     „        „ 
jGermg-ns    .         ,       2,030  =    98    „        ,, 


300 


CENTRAL  EUROPE 


Slovaks 

2,030  = 

94  per  thousand 

Croats 

.       1,830  = 

88    „        „ 

Serbs 

1,110  = 

53     ,»         *, 

Ruthenians 

470  = 

23     » 

Others 

460  = 

21      „ 

The  position  as  regards  a  majority  is  evident.  The 
Magyars,  without  the  help  of  geometrical  manipulation  of 
the  electoral  districts  and  pressure  on  the  voter,  cannot  be 
certain  that  they  will  not  be  outvoted  on  national  questions, 
although  they  are  united  amongst  themselves. 

In  Bosnia  and  Herzegovina  there  are  1760  Serbian  Croats 
out  of  1930  thousand.  The  next  biggest  group  is  that  of  the 
Turks  with  150  thousand ;  they  are,  however,  enumerated 
as  "  aHens." 

Austria-Hungary  with  Bosnia  and  Herzegovina,  that  is 
the  whole  monarchy,  contains  in  miUions  : 


Germans    . 

12.0 

Magyars     . 

lO.I 

Bohemians,  Slovaks 

8.5 

Serbian  Croats    . 

5.5 

Poles 

5.0 

Ruthenians 

4.0 

Roumanians 

3.2 

Slovenians 

1.3 

ItaUans 

I.O 

Others 

0.2 

50.8 

If  the  general  conception  of  the  Austro-Hungarian  Slavs 
is  considered,  a  big  group  of  24.3  milHons  can  be  made  up 
of  Tzechs,  Slovaks,  Poles,  Serbian  Croats,  Ruthenians  and 
Slovenians,  which  would  be  the  greatest  numerically  in  the 
whole  State ;  but  the  various  Slav  groups  are  not  a  unity 
in  this  sense.  Their  strength  is  noticeable  enough  without 
this. 

Most  of  these  figures  may  be  altered  as  a  result  of  the 
conclusion  of  peace,  it  is  only  certain  from  the  outset  that 


STATISTICAL  AND  HISTORICAL  301 

any  Magyar  increase  is  out  of  the  question,  and  that  a 
German  increase  is  only  possible  to  a  very  Hmited  extent. 
Further  discussions  about  other  possibihties  of  increase  are 
at  present  ill-timed.  It  may  be  noticed  merely  that  the 
number  of  Russian  Poles  is  given  in  an  out-of-date  census 
as  about  8  millions. 

IV.  The  Economic  Life  of  Central  Europe 

The  nimiber  of  ilUterates  cannot  be  determined  either 
from  the  recruiting  figures  or  from  the  population  census. 
Germany  does  the  former  and  Austria-Hungary  the  latter, 
so  that  the  information  is  not  quite  comparable.  Germany 
has  0.5  recruits  per  1000  who  cannot  read  and  write  ;  Austria 
had  356  per  1000  inhabitants  in  1900,  a  figure  which  must 
have  decreased  considerably  in  the  interval ;  Hungary  had 
437  P^r  1000  inhabitants  in  1910,  Bosnia  as  many  as  878 ! 
The  Hungarian  figures  sank  from  502  to  437  between  1900 
and  1910,  because  the  generation  growing  up  are  almost 
universally  subject  to  compulsory  education.  But  the  under- 
Ijdng  and  characteristic  difference  is  that  we  in  Germany 
have  already  reached  perhaps  the  third  generation  of  a 
universally  enforced  compulsory  education,  in  Austria  they 
are  on  the  whole  at  about  the  second,  in  Himgary  hardly  at 
the  first.  At  present  Austria  may  be  regarded  as  com- 
pletely embarked  on  the  normal  school  system,  and  Hungary 
as  nearly  so  embarked.  In  Prussia  1625  per  10,000  inhabi- 
tants are  primary  scholars,  in  Austria  1705,  in  Hungary  1319, 
but  in  Bosnia  only  222. 

For  the  sake  of  comparison  we  wiU  add  some  data  con- 
cerning the  educational  system  in  other  States.  Great 
Britain  has  1664  primary  scholars  per  10,000  inhabitants, 
France  1435,  Belgimn  1246,  Italy  908,  Roiunania  831, 
Russia  370,  United  States  1924.  It  must  be  taken  into 
account  here  that  the  length  of  compulsory  schooHng  or  of 
actual  attendance  at  school  is  different. 

The  censuses  of  industrial  activities  are  almost  entirely 
incomparable,  because  they  are  carried  out  according  to 


302  CENTIiAL  EUROPE 

different  principles.  For  example,  when  in  Germany 
30.4  per  cent.,  in  Austria  42.8  per  cent.,  in  Hungary  26.7  per 
cent,  of  the  female  population  are  declared  to  be  engaged  in 
industry  this  does  not  mean  that  the  employment  of  women 
is  more  frequent  in  Austria  than  in  Germany,  but  only  that 
wives  and  daughters  living  at  home  are  counted  differently. 
The  number  of  males  employed  in  trades  and  professions 
appear  fairly  equal  in  the  two  cases  as  something  over 
60  per  cent,  of  the  existing  male  population.  Owing  to  the 
different  methods  of  calculation,  however,  the  equahty  of  the 
occupational  groups  is  very  defective,  apart  from  the  fact 
that  the  occupational  census  was  held  in  different  years,  and 
the  last  one  available  for  Austria  is  that  of  1900. 
^  The  following  summary  of  occupational  groups  must  be 
taken  with  all  these  Umitations  and  provisos.  Out  of  every 
100  inhabitants  the  numbers  belonging  to  the  following 
occupational  groups  are : 

Agriculture  and  forestry 

Industry  and  mining 

Trade  and  commerce 

Army  and  navy 

Public  service  and  independent 

professions 
Domestic  and  personal  service 
Others  .... 

In  almost  every  group  there  are  besides  still  further 
differences  in  the  methods  of  enumeration.  For  example, 
inns  and  public  houses  are  classed  under  industries  in 
Austria-Hungary,  but  in  Germany  under  trade,  which  goes 
a  long  way  to  explain  the  different  figures  for  trade. 
Hungary  too  counts  under  "  others  "  people  whom  we  in 
Germany  do  not  regard  as  engaged  in  industry  at  all,  such 
as  dependents  and  vagrants. 

The  degree  of  organisation  in  the  occupations  cannot  be 
compared  statistically  at  all  except  in  the  case  of  the  wage- 
earners,  which  is  a  great  defect  from  our  point  of  view. 


G. 

A. 

H. 

35-2 

60.9 

69.7 

40.0 

233 

13.6 

12.4 

54 

4.2 

2.3 

1-7 

1.5 

3-9 

2.9 

2.5 

4-5 

3-5 

44 

1.7 

2.3 

4-1 

STATISTICAL  AND  HISTORICAL 


303 


Even  here  it  would  be  too  risky  to  attempt  to  calculate 
percentages. 

G.  A.  H. 

Trade-union  membership  3,754,000  693,000  119,000 

MiU.  Mk.  MUl.  Mk.  MiU.  Mk. 

Trade-union  property     .         94  19.7  2.8 

Trade-union  receipts      .         90  11.4  2.1 


For  purposes   of    comparison  we 
membership  for  various  countries  : 


give  the  trade-union 


Germany    . 

.     3,754,000 

Great  Britain 

.     3,281,000 

United  States 

.     2,526,000 

France 

.     1,027,000 

Italy  . 

872,000 

Austria 

693,000 

Belgium 

232,000 

Holland      . 

189,000 

Denmark    . 

139,000 

Switzerland 

131,000 

Sweden 

122,000 

Hungary     . 

119,000 

The  international  significance  of  a  Central  European 
centraHsed  system  of  trade  unions  is  obvious  from  these 
figures  without  further  discussion.  Unfortunately  we  cannot 
offer  a  comparison  of  the  degree  of  organisation  amongst 
agricultural  and  industrial  producers. 

The  international  summaries  concerning  the  average 
produce  per  hectare  of  arable  land  serve  best  to  measure 
the  productivity  of  labour. 

The  hectare  produces  in  100  kilograms  as  follows  : 


Wheat 

Barley 

Potatoes 

Belgium  . 

.   26 

27 

211 

Ireland    . 

.   26 

25 

161 

HoUand  . 

.   25 

27 

174 

Germany 

.     24 

22 

159 

304 


CENTRAL  EUROPE 


Wheat 

Barley 

Potato 

Switzerland 

22 

19 

155 

England  . 

21 

i8 

164 

Sweden    . 

21 

17 

100 

Norway  . 

l8 

20 

168 

Austria    . 

15 

16 

100 

Roumania 

.     14 

II 

68 

Canada    . 

14 

i6 

112 

Japan      . 

14 

19 

100 

Hungary 

18 

14 

75 

Italy 

12 

9 

61 

Bulgaria  . 

12 

II 

44 

United  States 

10 

13 

61 

Russia     . 

9 

10 

74 

In  order  to  value  this  most  important  and  interesting 
table  properly  the  superiority  of  the  North  Sea  climate  for 
the  production  of  corn  should  not  be  forgotten.  But  never- 
theless there  is  food  for  thought  in  the  fact  that  the  North 
Sea  countries  (free  trade  and  protectionist  without  distinc- 
tion !)  boast  the  highest  rate  in  agricultural  output.  In- 
dustrial capitalism  in  the  first  stage,  in  which  it  is  most 
strongly  developed  round  the  North  Sea,  indirectly  increases 
agricultural  productivity  in  many  ways. 


It  is  regrettable  that  a  comparative  estimate  of  the 
productivity  of  industrial  labour  is  not  feasible  or  only 
yields  very  doubtful  and  arbitrary  results.  Consequently 
we  must  attach  importance  to  some  indirect  data  which 
does  not  concern  productive  power  itself,  but  only  the 
technical  and  capitaUst  development  of  the  countries. 

Postal  conditions : 


G. 

A. 

H. 

Postal  packets  in  general 

7.0 

1.9 

0.7  milliards 

Telephones 

2.1 

0.3 

0.2 

Telegrams 

61 

23 

13    millions 

Staff       .... 

233,000 

71,000 

38,000 

STATISTICAL  AND  HISTORICAL  305 

It  is  clear  at  once  that  a  post  office  official  in  the  German 
Empire  facilitates  more  dispatches,  telegrams  and  conversa- 
tions than  one  in  Austria  or  Hungary,  but  it  must  be 
remembered  that  a  more  thickly  populated  country  is  easier 
to  provide  for. 

Railway  conditions : 

G.  A.-H. 

Length  of  railways      .       63,000       46,000  km. 
Per  10,000  inhabitants        9.5  9.0       „ 

Stock  per  km.    .         .     315,000     274,000  mks. 

Unfortunately  in  this  case,  so  far  as  I  can  see,  the  numbers 
of  staff  cannot  be  made  comparable  with  certainty  owing 
to  the  difference  in  the  railway  systems. 

Joint-stock  companies  (1911)  : 

G.  A.  H. 

Number  of  companies    53,000     740    2900 

Nominal  capital        .       16.3       3.3       2.0  milHard  mks. 

Here  it  must  be  remembered  that  in  Hungary  banks  and 
savings  banks  are  included.  The  small  number  of  joint- 
stock  companies  in  Austria  is  partly  explained  by  the  high 
joint-stock  company  tax. 

The  capital  in  joint-stock  companies  in  Great  Britain  is 
45.3  milliard  mks.,  in  France  10.8,  in  Russia  5.4,  Holland  3.0, 
Switzerland  2.6,  Belgium  2.3. 

Average    market   rate    of   discount    1913 :     Paris   3.84 
London  4.39,  Berlin  4.98,  Vienna  5.72. 


Another  way  in  which  to  compare  the  position  of  the 
population  is  by  means  of  the  statistics  of  consumption 
reckoned  per  head  of  the  population.  I  quote  the  following 
summary  (1912-13)  from  the  book  by  Pistov  which  has  just 
appeared  :  Die  osterreichisch-ungarische  Volkswirthschaft  (pub- 
lished by  G.  Reimer,  Berlin)  : 

G.  A.-H. 

Wheat  .         .         .      88)  I20|         kg. 

Rye       .         .         .     145^^^        84)'°^     „ 


3o6 


CENTRAL  EUROPE 


G. 

A.-H. 

52.6 

29.9  kg 

2.4 

I.I    „ 

3.6 

2.0    „ 

21.6 

13.0    „ 

24.6 

12.5    „ 

lOI 

46     1. 

1-7 

1.2  kg 

7.2 

4.3    „ 

Meat  (1910) 

Coffee 

Rice 

Sugar 

Salt 

Beer 

Tobacco 

Cotton  . 

In  respect  to  com,  seed  com  and  cattle  fodder  is  included, 
so  that  a  direct  inference  as  to  the  amount  of  bread  con- 
sumed per  individual  cannot  be  drawn.  In  the  cases  of 
salt  and  sugar  too,  indirect  uses  are  included.  The  con- 
sumption of  bread  is  certainly  somewhat  lower  in  Austria- 
Hungary.  But  the  lower  average  consumption  is  especially 
striking  in  regard  to  meat  and  sugar,  of  which  Austria- 
Hungary  produces  so  much.  The  primary  attainable  aim 
of  the  mass  of  the  Austro-Hungarian  population  must  be 
to  arrive  at  the  average  consumption  of  the  Germans  of  the 
Empire.  At  this  point  the  national  and  social  advantage 
involved  in  the  economic  stimulation  of  the  whole  province 
shows  itself  most  impressively. 


V.  Joint  Problems  in  War  Economics 

The  connection  with  the  international  economic  system 
before  the  war  is  recognisable  from  the  figures  for  imports 
and  exports.  A  summary  in  the  appendix  to  the  Statistical 
Year  Book  for  the  German  Empire  gives  the  following 
sequence : 

Share  of  the  States  in  international  conmierce  (1912)  : 


Million  mks. 

Per  cent 

Great  Britain 

.      27,400 

16.6 

Germany    . 

.      21,300 

12.9 

United  States      . 

.      16,200 

9.9 

France 

.      14,800 

9.0 

Holland      . 

.      11,400 

6.9 

STATISTICAL  AND  HISTORICAL  307 


Millions  mks. 

Per  cent. 

Belgium      . 

.        7,000 

4.2 

Russia 

5,800 

3.5 

Austria-Hungary 

.        5,600 

3-3 

Italy  . 

.        5,100 

3.1 

The  total  amount  of  goods  dealt  with  in  exportation  and 
importation  is  valued  at  164  milliards,  but  of  course  the 
same  commodity  gets  paid  for  twice,  and  indeed  in  case  of 
further  removals  four  and  more  times  over.  The  amount 
dealt  with  actually  in  international  trade  may  be  fixed  at 
60  to  70  miUiards,  or  approximately  twice  as  much  as  the 
calculable  annual  proceeds  of  the  German  national  economic 
S57stem.  This  immense  exchange  is  in  part  completely 
destroyed  by  the  war,  in  part  become  unsurveyable. 

The  EngUsh  plan  of  blockade  referred  originally  more  to 
Germany  than  to  Austria-Hungary,  still  Austria-Hungary 
too  has  had  to  suffer  from  its  effects,  but  has  held  out  well. 
The  fundamental  facts  of  the  blockade  scheme  were  : 

German  demand  from  foreign  countries  (1912,  in  million 
marks  value) : 

Raw  materials 
Half-finished  goods 
Finished  goods 
Food-stuffs  and  luxuries . 
Animals 

Total     .         .         .  10,800     10,000    —    800 

Austro-Hungarian  demand  from  foreign  countries  (1912, 
in  million  kronen) : 

Imports      Exports        Mill,  kr. 

Raw  materials  (including 

food-stuffs)      .         .  2000  960  — 1040 

Half-finished  goods         .  570  510  —     60 

Finished  goods       .         .  980  1260  -\-   280 

Total      .         .         .     3550        2730     -    820 


Imports 

Exports 

MilLmks. 

5000 

1500 

-3500 

1200 

IIOO 

—     100 

1500 

6400 

-1-4900 

2800 

1000 

—  1800 

300 

— 

-     300 

3o8 


CENTRAL  EUROPE 


The  balance  this  year  (1912)  is  especially  unfavourable 
owing  to  the  weather  conditions,  but  still  it  marks  the 
position  of  affairs  in  general.  Unfortunately  I  have  not 
yet  got  the  figures  for  1913  for  Austria. 

The  English  calculations  resulted  in  this  :  that  we  could 
neither  of  us  sell  our  finished  goods  abroad  and  could  not 
buy  raw  material  and  food-stuffs  from  abroad. 

The  more  important  items  of  imports  as  regards  food  and 
cattle  fodder  in  Germany  are,  after  exports  or  re-exports 
are  deducted,  the  following  (1913)  in  millions  of  marks. 

Wheat    . 
Wheaten  flour 
Rye 

Rye  flour 
Potatoes 
Beef 
Pork 
Eggs       . 
Lard 
Butter    . 
Rice 

Beet  sugar 
Beer 
Coffee     . 
Apples    . 
Herrings 
Barley    . 
Bran,  rice-dust 
Linseed  . 
Oil  cakes 
Palm  kernels 
Oats 
I    Clover  seed,  lucerne  seed 

This  statement  includes,  of  course,  the  imports  from 
neighbouring  countries  which  have  been  only  shghtly 
disturbed  by  the  war.     Still  the  position  was  very  question- 


Imports 

Exports 

Mill,  mks 

417 

88 

-329 

5 

44 

+  39 

42 

133 

+  91 

— 

39 

+  39 

25 

18 

-  7 

36 

— 

-  36 

24 

— 

-  24 

194 

2 

— 192 

147 

— 

-147 

119 

I 

-118 

104 

43 

-  61 

— 

265 

+  265 

10 

15 

4-  5 

35 

— 

-  35 

46 

— 

-  46 

73 

2 

-  71 

390 

I 

-389 

149 

2 

-147 

130 

I 

— 129 

119 

39 

-  80 

104 

— 

— 104 

60 

93 

-f  33 

46 

17 

-  29 

STATISTICAL  AND  HISTORICAL  309 

able,  for  it  is  evident  that  the  only  important  positive  items 
were  sugar  and  rye.  But  rye  largely  took  the  place  of 
barley  as  fodder.  Under  these  circumstcinces  the  feeding  of 
humans  and  cattle  could  only  be  continued  by  the  constmip- 
tion  of  stores  and  by  systematic  economy.  We  cannot  so 
far  prepare  statistical  data  as  to  the  amount  of  stores. 
There  was  more  of  all  the  principal  stuffs  than  any  one  had 
previously  thought. 

A  collection  of  the  Government  regulations  for  war 
economics  will  be  found  in  the  Mitteilungen  und  Nachrichter 
der  Kriegszentrale  des  Hansabundes  (Hillger,  Berlin). 

The  best  summary  of  the  continually  growing  materials 
for  the  science  of  war  economics  wiU  be  found  in  WeU- 
wirthschaftliches  Archiv,  edited  by  Professor  Harms  of  ICiel 
(Fischer,  Jena).  The  speech  of  State  Secretary  Helfferich, 
included  in  the  collection  Der  deuische  Krieg  (Part  No.  41-42), 
edited  by  Dr.  E.  Jackh,  gives  information  concerning  the 
financial  position  during  the  war.  General  points  of  view 
are  given  in :  Weltwirthschaft  und  Nationalwirthschaft  by 
Professor  Franz  Oppenheimer,  and  Vorrathswirthschaft  und 
Volkswirthschaft  by  Professor  Herm.  Levy,  Professor  Jas- 
trow  describes  the  economic  problems  at  the  beginning  of 
the  war  in  Im  Kriegszustand,  die  Umformung  des  offenilichen 
Lebens  in  der  ersten  Kriegswoche  (Georg  Reimer,  Berlin). 


With  regard  to  the  rise  of  prices  during  the  war  we  refer 
to  the  WeUwirthschaftliche  Archiv  (memoir  by  Professor* 
Eulenburg).  Here  we  shall  only  give  retail  prices  of  the 
Berlin  Co-operative  Stores. 

Retail  prices  {\  kg.  in  pfennige) : 

July  1914      April  1915 


Butter 

.     136 

160 

+  24 

Lard  . 

.       66 

160 

+  94 

Bacon 

.       80 

160 

+  80 

Peas   . 

.       25 

58 

+  33 

Potatoes 

.      40 

95 

+  55 

310 


CENTRAL  EUROPE 


July  1914 

April  1915 

Rye  flour     . 

14 

24 

+  10 

Wheat  flour 

.        18 

26 

+    8 

Rice    . 

.        26 

60 

+  34 

Bread 

.        30 

44 

+  14 

The  rise  in  the  price  of  bread  would  have  been  very  much 
greater  had  it  not  been  for  the  maximum  price  regulation. 
We  find  a  similar  rise  in  prices,  in  parts  even  higher,  in 
Austria-Hungary. 

It  is  a  number  of  years  since  the  whole  Austria- 
Hungarian  Monarchy  was  completely  self-supporting.  The 
increased  importation  in  the  group  "  com,  pulse,  flour  "  is 
as  follows : 


1911 
1912 


605,000  tons 
692,000  tons 


In  other  words :  in  1912  Austria-Himgary  purchased 
food-stuffs  and  luxuries  from  abroad  to  the  value  of  about 
100  milhon  kronen. 

The  following  table  in  millions  of  kronen,  for  1912,  is, 
however,  important  as  showing  the  mutual  economic 
relations  of  Austria  and  Hungary,  and  hence  as  an  aid  to 
understanding  the  economic  tension  during  the  war  : 


From  Hungary 

From  Austria 

to  Austria 

to  Hungary 

Com 
Flour     . 

.     298  mill.  kr. 
.     259 

13  mill,  kr. 

Rice 

.       13 

3       „ 

Fruit     . 

.        8        „ 

5        „ 

Potatoes 

4 

— 

Beet  sugar 

6        „ 

— 

Cattle    . 
Pigs       . 

161  mill.  head| 

91     »      >,    f 

4  mill,  hea 

Milk       . 

12  mill.  kr. 

— 

Eggs      . 

15       „ 

— 

Butter  . 

8       „ 

— 

Lard      . 

13       « 

— 

Bacon    . 

II 

— 

STATISTICAL  AND  HISTORICAL 


311 


Wine     . 

From  Hungary 
to  Austria 

60  mill.  kr. 

From  Austria 
to  Hungary 

15  mill.  kr. 

Meat 
Sugar     . 
Tobacco 

.       17       » 
2 

.       17       „ 

4 
14       » 

The  line  ( — )  in  the  last  column  does  not  mean  that 
there  is  absolutely  no  importation  from  Austria  to  Hungary, 
but  only  that  it  is  insignificant.  The  whole  pictiure  is  quite 
clear :  Hungary  is  the  agricultural  country  for  Austria  ! 
Austria  taken  by  itself  is  a  country  importing  agricultural 
produce  as  much  or  almost  more  than  Germany. 

The  Austrian  exports  to  Himgary  include  the  following  as 
chief  items  (surplus  calculated) : 


Coal  . 

Coke  . 

Cotton  yam 

Cotton  goods 

Linen  textures 

Sacks 

Woollen  goods 

Silk  goods  . 

Hats  . 

Clothes 

Underlinen 

Paper  and  paper  goods 

India-rubber  goods 

Leather,  leather  goods 

Wooden  wares 

Glass  goods 

Fancy  wares 

Iron,  iron  goods  . 

Base  metal  goods 

Machines,  apparatus 

Electrical  apparatus 

Boats 


MiU.  kr. 
22 

15 

21 

222 

17 

II 

120 

44 
16 

52 
23 
30 
10 
80 

25 
21 

15 
100 

37 
64 

15 

8 


312  CENTRAL  EUROPE 

MiU.  kr. 

Precious  metals,  jewels  ...  26 
Instruments,  clocks  ....  19 
Drugs 8 

It  is  only  on  the  basis  of  these  summaries  that  we  can 
understand  the  fact  that  there  are  two  commercial  policies 
and  two  economic  States  within  the  Dual  Monarchy.  But  it 
would  be  the  same  with  us  in  the  German  Empire  if  we  had 
a  political  frontier  to  cross  at  the  Elbe.  Who  amongst  us 
would  wish  to  have  one  ? 


VI.  Our  Position  in  the  World's  Economic  System 

Hiibner's  Geographisch-statistischen  Tabellen  still  reckons 
sixty-one  independent  States  on  the  earth's  surface,  amongst 
which  however  are  included  dwarf  States  such  as  Andorra, 
Costa  Rica,  the  Dominican  RepubUc,  Honduras,  Liechten- 
stein, San  Marino,  Monaco,  Panama,  the  Polar  regions  (!)  and 
Samos,  and  States  whose  dependence  is  well  known  are  stUl 
called  independent,  such  as  "Egypt,  Arabia,  Nepal,  Oman, 
Morocco.  In  reality  it  is  impossible  to  say  exactly  how 
many  genuinely  independent  States  there  are,  since  the 
concept  of  sovereignty  is  variable.  But  even  on  a  generous 
appreciation  there  are  not  more  than  fifty. 

If  we  assume  that  genuine  political  sovereignty  begins  at 
a  million  inhabitants  we  can  construct  the  following  groups. 

Classification  of  States  according  to  size  (with  colonies)  : 


States  of  over  100  millions : 

Great  Britain 

•     443) 

China 

.     330 

Russia 

.     169 

United  States 

.     loyi 

states  of  from  50  to  100  millions  : 

France 

.      98 

Germany     . 

.      77 

Japan 

•       72 

Austria-Hungary 

.       51 

1049  n^- 


298  mill. 


STATISTICAL  AND  HISTORICAL 


313 


states  of  from  20  to 

50  millions : 

Netherlands 

.           .           • 

44\ 

Italy  . 

Brazil 

Turkey 

Belgium 

Spain 

. 

36 

25 
22 
22 

2I> 

170  mill. 

States  of  from  10  to 

20  millions : 

Mexico 

•           .           • 

15) 

Portugal 
Persia 

. 

15 1  40  mill. 
10 

states  of  from  5  to  10  millions : 

Roumania  . 

8\ 

Abyssinia 
Siam  . 

8 
8 

Argentina   . 
Sweden 

7 
6 

.  48  mill. 

Peru 

6 

' 

Colimibia    . 

5/ 

states  of  from  i  to 

3  millions : 

. 

Afghanistan 

Bulgaria 

Greece 

4> 

4 

4 

Switzerland 

4 

Serbia 

4 

Chile  . 

3 

Denmark     . 

3 

Haiti 
Venezuela   . 

3 
3 

)  45  mill. 

BoUvia 

2 

Cuba  . 

2 

Ecuador 

2 

Guatemala  . 

2 

Liberia 

2 

Norway 
Uruguay 

2 
I' 

314  CENTRAL  EUROPE 

It  is  unnecessary  to  say  how  much  States  of  the  same  class 
as  to  size  often  differ  quaHtatively.  At  the  same  time  this 
summary  shows  the  complete  victory  of  the  political  "  large 
scale  industry  "  system.  Almost  two-thirds  of  mankind 
belong  to  the  four  world-group  economic  areas  of  the 
first  rank.  The  world's  history  is  in  reality  a  game  played 
by  the  first  eight  Powers.  In  the  game  a  permanent  com- 
bination between  Germany  and  Austria-Hungary,  even 
without  the  accession  of  other  neighbouriijg  States,  would 
be  a  change  of  the  greatest  significance.  It  would  then  be  : 
Great  Britain,  China,  Russia,  Mid-Europe,  the  United 
States,  France,  Japan.  But  whether  China  is  here  a  fellow- 
player  or  an  object  remains  to  be  seen. 


The  German  colonies  hitherto  existing  were  or  are  as 
follows  (area  in  looo  sq.km.)  : 

Population 

— — '^ — — , 

Coloured 

7,660,000 

2,650,000 

1,030,000 

84,000 

600,000  (?) 

38,000 
190,000 

Thus  an  area  of  about  3  mill,  sq.km.,  white  inhabitants 
only  perhaps  30,000,  coloured  inhabitants  something  over 
12  millions.     The  estimates  of  population  fluctuate  greatly. 

Austria-Hungary  has  no  colonies. 

The  colonial  possessions  of  the  European  neighbouring 
coimtries  are  as  follows  : 

Belgium  possesses  the  Belgian  Congo  with  an  area  of 
2.4  million  sq.km.  and  about  15  million  inhabitants. 

The  Netherlands  possess  in  the  East  Indies  the  large  and 
small  Sunda  Islands  with  an  area  of  almost  2  million  sq.km. 


Area 

White 

East  Africa     . 

995 

5,300 

Kamerun 

790 

1,900 

Togo      .      '  . 

87 

400 

South  West  Africa  . 

835 

14,800 

New  Guinea    . 

240 

1,000 
500 

Caroline  Islands,  etc. 

2.5 

Samoa    . 

2.6 

500 

Kiantschou     . 

0.6 

4,500 

STATISTICAL  AND  HISTORICAL  315 

and  about  38  million  inhabitants ;  in  addition  smaller 
territories  in  the  West  Indies. 

Denmark  possesses  the  Faroe  Islands,  Greenland,  West 
Indian  islands.  About  200,000  sq.km.  of  inhabitable  country, 
140,000  inhabitants. 

Norway  and  Sweden  possess  no  colonies,  nor  do  Switzer- 
land and  the  Balkan  States. 


Numbers  of  populations  for  all  the  Central  European 
territories  between  France  and  Italy  on  the  one  ^de  and 
Russia  on  the  other  side  (colonial  populations  not  counted), 
1910: 

Mill,  inhab. 

Germany    ......     64.9 


Austria-Hungary 

Roumania 

Belgimn     . 

Netherlands 

Sweden 

Serbia 

Bulgaria     . 

Greece 

Switzerland 

Denmark   . 

Norway 

Albania 

Luxemburg 


514 

7.6 

7-5 
6.2 

5.6 
4-5 
4-3 
4-3 
3.8 
2.8 
2.4 
0.8 
0-3 
166.4 


Germany  and  Austria-Hungary  together  contain  more 
than  two-thirds  of  the  whole  number  here  considered.  It 
Ues  outside  any  present  consideration  that  all  these  States 
should  ever  belong  to  any  sort  of  union,  for  there  is  not  only 
their  will  to  be  independent,  justified  as  it  is  by  history,  to 
take  into  accoimt,  but  also  their  mutual  antagonism. 


3i6  CENTRAL  EUROPE 

The  following  summaries  will  serve  for  the  comparison 
of  the  four  great  world-group  economic  areas  amongst 
which,  under  Mid-Europe,  Germany  and  Austria-Hungary 
alone  are  included.  Gr.  =  Greater  Britain,  wherein  gene- 
rally the  whole  wide  international  province  is  not  considered, 
but  still  the  greater  part  of  it,  that  is  in  addition  to  the 
European  Home  Country  also  British  India,  New  Zealand, 
and  Australia.  Canada  and  South  Africa  are  wanting  for 
various  data.  Rs.  =  Russia,  and  that  unfortunately  without 
the  Asiatic  portions,  and  occasionally  without  North 
Caucasia  and  Finland.  The  inequality  of  these  statistics 
cannot  be  remedied  even  by  the  Statistical  Offices  themselves. 
Us.  =  the  United  States  ;  Me.  =  Mid-Europe. 

Uses  made  of  Soil  in  millions  of  hectares 

Gr.       Rs.        Us.       Me. 

Total  area  .  .  .  760  516  770  116 
Agriculturally  used  .  146  210  194  67 
Forest         ...      50    108    220      33 

Here  Canada  is  missing,  and  its  inclusion  would  noticeably 
increase  the  figures  for  the  agricultural  area  and  for  forest 
in  the  case  of  Greater  Britain. 

Crops  (1912-13)  in  millions  of  tons 

Gr.         Rs.         Us.         Me. 

Wheat  .  .  .  20  23  21  II 
Rye         ...     —        25  I        16 

Barley     ...       3        12  4  8 

Here  Canada  is  counted  in.  The  quantity  of  self-produced 
bread-corn  is  greater  for  Mid-Europe  than  for  Greater 
Britain  or  for  the  United  States. 

Live  Stock  in  millions  of  heads 


Gr. 

Rs. 

Us. 

Me. 

Horses  . 

II 

25 

21 

9 

Cattle    . 

.     149 

37 

57 

36 

Pigs       . 

8 

12 

61 

37 

Sheep  and  goats 

.     212 

43 

54 

22 

STATISTICAL  AND  HISTORICAL  317 

The  figures  for  Greater  Britain  for  cattle  are  explained  by 
India,  those  for  sheep  by  AustraUa. 

Sugar  Production  in  millions  of  tons 

Gr.  Rs.  Us.  Me. 

Beet  sugar    .         .     —         1.2        0.5        4.1 
Cane  sugar   .         .2.9         —        0.5         — 

2.9        1.2        i.o        4.1 
Here  Mid-Europe  rules  the  market. 

Cotton  Crop 

Unfortunately  data  from  Russia  are  lacking.  Mid- 
Europe  without  colonies  has  no  crop  of  its  own.  The  world- 
crop  for  1912-13  amounted  to  27.2  million  bales.  Of  these 
the  United  States  yields  14.1  and  Greater  Britain  5.5. 

Cotton  spindles 

Millions 

Great  Britain  with  India  and  Canada  63 
United  States  ....  32 
Mid-Europe  .....  16 
Russia  .....         9 

World's  total  .         .         .         .145 

Mid-Europe's  cotton  manufacture  ranks  third  in  the 
world. 

Coal  and  Lignite 

Greater  Britain,  including  Canada,  India,  AustraHa,  South 
Africa  and  British  Borneo,  307  miUion  tons ;  Russia, 
including  its  Asiatic  possessions,  31  miUion  tons  ;  the  United 
States,  450  miUion  tons  ;  Mid-Europe,  307  milUon  tons, 
exactly  the  same  as  Greater  Britain.  In  addition  the  Mid- 
European  coal-supplies  are  of  greater  future  richness  than 
those  of  Great  Britain ;  it  is  true  that  in  Greater  Britain 
the  share  of  pit  coal  is  greater  and  that  of  hgnite  smaller. 


3i8 


CENTRAL  EUROPE 


Iron  Ore  and  Pig-iron  in  millions  of  tons 

Gr.        Rs.        Us.         Me. 

Iron  ore    .         .         .     15        8        60        38 
Pig-iron     .         .         .     10        4        30        20 

Here  the  struggle  between  the  United  States  and  Mid- 
Europe  is  a  future  problem  in  international  economics. 

Owing  to  the  dissimilarity  in  the  materials  all  these 
summaries  are  uncertain  in  details,  and  are  based  for  the 
most  part  on  the  groupings  given  in  the  appendix  to  the 
Statistical  Year  Book  for  the  German  Empire.  We  ought 
to  learn  from  them  to  think  in  terms  of  great  national 
economic  quantities.  So  soon  as  we  do  this  we  arrive 
inevitably  at  the  conclusion  that  even  the  combined  quan- 
tities of  Germany  and  Austria-Hungary  are  not,  properly 
speaking,  great  for  international  economics,  but  yet  they  will 
form  a  very  excellent  basis  for  the  effort  and  for  the  future 
of  Mid-Europe. 


VII.  Tariff  Problems 

According  to  the  statistics  of  the  German  Empire,  goods 
of  the  following  declared  values  have  been  imported  and 
exported  between  Germany  and  Austria-Hungary  during 
recent  years. 

German  and  Austro-Himgarian  trade  in  millions  of  marks  : 


From  A.-H.  to  G. 

From  G.  to  A.-H. 

1909    . 

•   750 

770 

I9I0 

.   760 

820 

I9II 

.   740 

920 

I9I2 

.   830 

1040 

I9I3  • 

.   830    .     . 

1 100 

The  tendency  of  the  development  is  recognisable  at  once  : 
Austria-Hungary  uses  its  natural  products  itself  to  an 
increasing  extent  and  cannot  increase  its  industrial  imports 
into  Germany  as  much  as  the  increase  in  the  converse 


STATISTICAL  AND  HISTORICAL 


319 


direction.  Owing  to  this  development  the  existing  com- 
mercial treaty  is  regarded  as  unfavourable  in  Austria 
(-Hungary). 

From  the  German  point  of  view  the  increase  in  our 
exports  to  Austria-Himgary  is  not  unusually  high,  for  our 
exports  have  increased  since  1907  in  the  following  propor- 
tions, if  the  exportation  for  1907  is  expressed  as  100. 

Growth  of  German  exports,  1907-1913  : 


To  Great  Britain     . 

.     as  100 

136 

To  France 

.     as  100 

176 

To  Russia 

.     as  100 

201 

To  the  United  States 

.     as  100 

109 

To  Austria-Hungary 

.     as  100 

154 

On  the  average 

.     as  100 

155 

German  exports  increased  in  value  from  1909  to  1913  by 
3.5  milliard  marks.  Of  this  immense  increase  330  miUions 
resulted  from  the  exports  to  Austria-Hungary,  or  not 
quite  a  tenth  part  of  our  increase.  German  exports  to 
Russia  rose  in  the  same  period  by  440  nuUion  marks,  those 
to  France  by  330,  likewise  those  to  Great  Britcdn  by  420. 
A  quite  general  emanation  of  economic  vigour  in  Germany 
is  in  question,  which  is  only  felt  more  severely  in  Austria- 
Hungary  because  its  own  export  trade  is  unable  to  keep 
pace. 

The  Russian  imports  to  Germany  during  this  same  period 
rose  and  fell  according  to  the  results  of  the  harvest,  whereas 
Austria-Hungary,  having  Uttle  surplus  crop  to  dispose  of, 
could  share  but  Uttle  in  these  lucky  profits  from  the  German 
years  of  scarcity. 

German  imports  from  Russia  and  Austria-Himgary,  in 
milHon  marks : 

From  Rs.  From  A.-H. 

1909        .  .  .      1360  .  .  750 


1910 
1911 
1912 
I913 


1390 
1630 
1530 
1420 


760 
740 
830 
830 


320  CENTRAL  EUROPE 

Since  Russia  has  no  more  favourable  a  commercial 
treaty  with  Germany  than  has  Austria-Hungary,  it  is 
evident  that  the  commercial  treaty  is  not  responsible  for 
the  difference. 

If  we  examine  the  individual  items,  Austrian  imports  to 
Germany  have  increased  in  the  following  principal  articles  : 
eggs,  rough  pinewood,  calf-skins,  hides,  linen  yarn,  bed 
feathers,  petroleum,  beer,  wood  for  wood  pulp,  apples,  oil 
cakes,  china,  lubricating  oil,  skins,  mine  timber,  etc.  But 
the  imports  were  decreasing  or  stationary  in  the  following 
principal  articles  :  lignite,  oxen,  sawn  pinewood,  malt,  coal, 
hops,  horses,  cows,  purple  clover  seed,  hens,  French  beans, 
bran,  etc.  In  between  there  are  fluctuating  articles.  In 
each  individual  case  the  decline  may  be  due  to  very  different 
causes,  to  tariff  or  climate  or  home  demand,  but  careful 
reconsideration  of  the  apparently  regular  occurrence  leads 
back  always  to  the  fundamental  fact  that  Austria-Hungary, 
owing  to  its  too  small  average  crop  per  acre  in  relation  to 
its  increasing  home  demand,  is,  except  for  forest  products, 
ceasing  to  be  an  exporting  agricultural  country,  without  so 
far  having  the  power  to  secure  a  corresponding  sale  on 
foreign  markets  by  means  of  its  own  industries  which  are 
closely  adapted  to  native  products. 

If  we  attempt  to  give  some  meaning  to  this  same  process 
with  the  help  of  the  Austrian  statistics,  the  impression 
strengthens  that  the  demand  for  imports  is  growing  more 
rapidly  than  the  possibiUty  of  exports.  The  increase  in 
importation  swells  disquietingly,  whilst  the  exportation 
makes  slower  progress.  Expressed  in  money,  the  adverse 
balance  of  trade  in  1912  amounted  to  over  740  million  kronen, 
a  sum  which  is  out  of  all  proportion  to  the  relations  of 
Austria-Hungary  to  foreign  countries  in  respect  to  capital. 

According  to  the  Austrian  data  the  total  Austro-Hun- 
garian  exportation  for  1907  to  1912  has  increased  in  all  by 
268  miUion  kronen,  or  about  by  100  :  no.  The  increase 
consists,  if  we  compare  these  particular  years,  in  petroleum, 
sugar,  eggs,  fats,  wood  and  wooden  wares,  and  also  in 
horses,  but  not  in  cattle,  scarcely  in  malt,  little  in  linen  and 


STATISTICAL  AND  HISTORICAL  321 

hemp  goods,  not  at  all  in  com.    Most  industries  gain  access 
to  foreign  countries  slowly  and  with  difficulty. 

Considering  the  state  of  affairs  it  is  comprehensible  if  all 
tariff  questions  are  treated  with  a  certain  timidity.  It  is 
obvious  that  a  national  economic  system  in  the  position 
and  imder  the  special  pressure  of  the  effects  of  the  war  will 
not  embark  on  experiments  which  are  still  incalculable. 
We  Germans  of  the  Empire  must  understand  this  if  we 
want  to  work  together  at  all  with  the  Austrians  and 
Hungarians.  But  just  on  account  of  this  position  we  assert 
that  the  change  to  better  things  cannot  be  brought  about 
by  a  customs  union  alone.  Austria-Hungary  needs  the 
increase  in  intensity  and  the  international-poUtical  union 
with  Germany,  which  has  already  experienced  a  development 
similar  to  that  which  Austria-Hungary  is  now  going  through, 
and  that  about  forty  years  ago,  when  it  was  easier  to  convert 
oneself  from  an  agricidtural  exporting  country  into  an 
industrial  exporting  country  with  increased  agricultural 
output  at  home. 

VIII.  Constitutional  Problems 

The  German  Imperial  Constitution  has  the  following 
preliminary  stages  : 

(i)  The  Roman  Imperial  German  nation,  from  the  Peace 
of  Westphalia  in  1648  to  the  abdication  of  the  Imperial 
crown  in  1806,  was  a  so-called  State  of  States,  that  is  a 
union  of  sovereign  reigning  princes  with  an  Imperial  Diet. 
This  Imperial  Diet  consisted  of  the  electoral  council,  the 
princes'  council  and  the  deputies  (Kollegium)  of  the  Imperial 
cities.  The  Emperor,  although  the  Crown  in  reality  devolved 
by  inheritance,  was  elected  after  the  ancient  fashion.  He 
summoned  the  Diet  according  to  the  constitution.  But  from 
1663  onwards  the  Diet  was  permanently  in  session  at  Pegens- 
burg.  For  religious  affairs  there  was  the  Corpus  Catholicorum 
and  the  Corpus  Evangelicorum.  An  Imperial  decree  required 
the  assent  of  all  the  corporate  bodies  summoned  for  the 
purpose    and   the    Emperor's    decree.     The    business   was 


322  CENTRAL  EUROPE 

carried  on  by  deputations.     The  resolution  of  a  deputation,  if 
confirmed  by  the  Emperor,  had  the  force  of  an  Imperial  decree. 
The  system  remained  almost  inoperative  for  joint  legisla- 
tion. 

(2)  The  Confederation  of  the  Rhine,  1806-13,  arose  in 
virtue  of  the  transformation  of  the  Imperial  constitution 
by  the  conclusive  resolution  of  the  Imperial  deputation  in 
1803  under  French  management.  It  included  aU  Germany 
with  the  exception  of  Austria,  Prussia  on  the  right  bank  of 
the  Elbe,  the  Swedish  and  Danish  possessions  and  the 
Hansa  towns.  The  Confederation  took  over  the  existing 
Imperial  rights  so  far  as  the  alterations  were  not  ex- 
pressly stated.  The  Diet  of  the  Rhenish  Confederation 
was  to  be  summoned  at  Frankfurt-on-Main,  but  it  never 
met. 

(3)  The  German  Confederation,  1815-48,  was  based  on 
the  Act  of  the  German  Confederation  of  the  Vienna  Congress. 
It  included  only  those  territories  in  Austria  and  Prussia 
which  had  earlier  belonged  to  the  Roman  Empire  of  German 
nations,  and  in  addition  all  the  German  moderate-sized  and 
small  States,  even  those  which  like  Hanover  and  Schleswig- 
Holstein  were  united  with  sovereign  States  with  extra- 
German  rulers.  The  Confederation  was,  as  Arndt  expresses 
it  in  Staatsrecht  des  Deutschen  Retches,  a  "  union  according  to 
international  law  of  German  sovereign  princes  and  free 
towns."  Its  inner  constitution  was  based  on  treaties,  and  it 
wished  to  appear  as  a  politically  united  Power  in  its  outward 
relations.  Every  extension  of  the  Confederation's  sphere  of 
activity  required  the  unanimity  of  the  Diet  meeting  in 
Frankfurt-on-Main,  owing  to  the  adherence  to  the  treaty 
system.  This  Diet  was  under  the  presidency  of  Austria,  and 
consisted  of  representatives  of  the  princes  and  States  con- 
cerned. There  was  no  special  army  of  the  Confederation, 
but  only  an  obHgation  to  keep  contingents  in  readiness. 

(4)  The  Revolution  Parliament,  1848-50.  The  National 
Assembly  met  in  Frankfurt-on-Main  as  a  meeting  to  prepare 
the  way  for  a  German  Imperial  Constitution,  and  passed  a 
draft  constitution,  the  principal  parts  of  which  were  later 


STATISTICAL  AND  HISTORICAL  323 

adopted  by  Bismarck.  This  draft  constitution  altered 
nothing  in  the  previous  extent  of  the  Empire,  and  thus 
included  Austria  and  Prussia  only  to  the  extent  of  the  old 
German  constituent  parts.  In  regard  to  polyglot  State 
provinces  it  was  resolved :  "  If  a  German  province  and  a 
non-German  province  have  the  same  sovereign,  the  German 
province  shall  have  a  separate  constitution.  Government 
and  administration."  Mihtary  power  was  declared  to  be 
completely  an  Imperial  matter.  Legal  regulations,  and 
legislation  on  economic  or  conmiercial  matters  may  only 
be  taken  in  hand  by  the  Imperial  authority  in  so  far  as 
the  organs  of  the  Empire  determine  on  it.  In  this  con- 
dition Ues  the  essence  of  the  federal  State  as  opposed  to 
the  State  confederation.  Imperial  laws  take  precedence 
of  provincial  laws.  The  Diet  consists  of  a  federal  Chamber 
[Staatenhaus)  and  a  popular  Chamber  {Volkshaus),  of  which 
the  former  corresponded,  say,  to  the  Diet  of  the  German 
Confederation  at  Frankfurt-on-Main,  the  second  was  con- 
ceived somewhat  like  the  later  German  Reichstag.  The 
Imperial  Crown  was  offered  to  the  Prussian  King  by  290 
votes  to  248  abstentions.  The  whole  scheme  coUapsed 
when  this  offer  was  refused. 

(5)  The  German  Confederation,  1850-66,  is  not  distin- 
guished in  pubUc  law  from  the  Confederation  as  hitherto 
existing,  but,  at  its  side,  grows  up  the  Customs  Union  founded 
by  Prussia  which,  since  about  1852,  comprehended  the 
territory  of  the  later  German  Empire.  In  virtue  of  the 
Peace  of  Prague  the  Austrian  Emperor  acknowledges  the 
dissolution  of  the  existing  confederation,  and  gives  his 
consent  to  a  German  formation  without  the  inclusion  of  the 
Austrian  Imperial  State. 

(6)  The  North  German  Confederation,  1866-71,  embraces 
North  Germany  up  to  the  boundary  of  the  Main.  The 
constitution  is  the  same  as  the  present  Imperial  constitution 
in  all  essential  parts.  The  King  of  Prussia  is  hereditary 
President,  and  has  executive  power.  Legislative  power 
rests  with  the  Bundesrat  and  Reichstag.  The  Bundesrat  is 
formed  in  Berlin  on  the  plan  of  the  Frankfurt  example. 


324  CENTRAL  EUROPE 

Alongside  of  the  North  German  Reichstag  there  is  the 
Customs  Parhament  in  which  representatives  of  South 
Germany  take  part.  The  North  German  Confederation  is 
a  federal  State,  for  it  has  its  own  legislative  powers. 

(7)  The  German  Empire  from  1871  onwards  is  an  exten- 
sion of  the  North  German  Confederation  by  the  accession 
of  the  South  German  States  and  by  the  inclusion  of  the 
Customs  Union  in  the  confederate  organisation.  The  Prussian 
King  bears  the  title  of  German  Emperor.  Special  agree- 
ments are  in  force  with  Bavaria  and  Wiirttemberg,  of  the 
military  part  of  which  we  have  already  spoken  in  the  text 
of  our  book.  The  Imperial  organs  of  government  are  the 
Emperor,  the  Bundesrat  and  the  Reichstag. 

The  Emperor  is  General  and  President  of  the  Confedera- 
tion, as  King  of  Prussia  he  instructs  the  Prussian  delegation 
in  the  Bundesrat,  and  appoints  and  removes  from  office  the 
Imperial  Chancellor.  Since  the  foundation  of  the  Empire 
his  position  has  on  the  whole  gained  in  importance  as  the 
Imperial  activities  have  increased. 

There  are  sixty-one  votes  in  the  Bundesrat,  of  which 
Prussia  has  only  seventeen.  But  in  addition  Prussia  has  the 
right  in  respect  to  mihtary,  customs  and  taxation  questions 
to  prevent  any  alteration  by  her  adverse  vote  alone.  Deci- 
sions by  a  majority  vote  very  seldom  occur.  The  Bundesrat 
has  in  fact  become  a  permanent  representative  body  which 
issues  proposals  for  laws  as  well  as  regulations  for  their 
enforcement.  Constitutionally  the  Bundesrat  gives  instruc- 
tions to  the  Imperial  Departments  subordinate  to  the 
Imperial  Chancellor,  but  in  reahty  the  actual  initiative 
often  rests  with  these  Departments.  The  Imperial  Depart- 
ments are  :  the  Foreign  Office,  the  Imperial  Home  Office, 
the  Admiralty,  the  Imperial  Department  of  Justice,  the 
Imperial  Treasury  Department,  the  Imperial  Railway 
Bureau,  the  Imperial  Colonial  Office,  etc.  There  is  no 
Imperial  War  Office  since  there  still  exist  Prussian,  Bavarian 
and  Wiirttembergish  armies.  In  reality  the  Prussian 
Minister  of  War  is  almost  the  same  as  an  Imperial  Minister 
of  War. 


STATISTICAL  AND  HISTORICAL  325 

The  Reichstag  results  from  direct  election  and  has  nothing 
to  do  with  delegations  from  other  representative  bodies.  It 
is  the  surest  evidence  of  the  existence  of  Imperial  citizen- 
ship rights.  It  contains  397  deputies.  The  consent  of  the 
Reichstag  is  necessary  in  order  to  suspend  or  alter  any 
Imperial  law,  and  schemes  for  home  finance  and  loans  are 
counted  as  laws  for  this  purpose. 

This  superstructure  formed  of  Emperor,  Bundesrat  and 
Reichstag  has  produced  a  thoroughly  individual  and  satis- 
factory political  Ufe  for  the  German  Empire.  Demands  for 
alterations  refer  rather  to  the  often  very  antiquated  con- 
stitutions of  the  separate  States  than  to  the  Imperial 
constitution. 


The  Austro-Hungarian  Constitution  is  not  a  uniform 
State  constitution  in  the  same  sense  as  the  German  Imperial 
Constitution.  Its  older  stages  are,  in  respect  to  the  German 
Austrian  Crown  lands,  the  same  as  those  of  the  German 
Empire.  But  the  homogeneity  of  Austria-Hungary  is 
expressed  in  principle  in  the  Pragmatic  Sanction  of  the 
Emperor  Karl  V.  in  1713,  wherein  all  the  sectional  possessions 
of  the  whole  monarchy  bound  themselves  to  the  same  order 
of  succession  and  thus  to  permanent  association.  The 
unity  of  the  State  is  from  the  outset  monarchical.  The  title 
of  Emperor  of  Austria  dates  from  1804. 

The  constitution  of  the  centralised  State  was  legally 
formed  by  the  Imperial  Diploma  of  i860  and  the  Patent  of 
1861,  depending  on  it.  This  constitution  comprises  a 
Landtag  and  Reichsrat  with  almost  the  same  principle  of 
division  as  in  the  German  Imperial  draft  constitution  of 
1848,  except  that  there  is  only  the  one  sovereign  in  question 
throughout.  A  distinction  is  also  made  in  this  Act  of  the 
Constitution  between  the  countries  belonging  to  the  Hun- 
garian Crown  and  those  of  the  Austrian  section,  but  the 
preponderating  intention  is  centralisation. 

The  decisive  year  for  the  constitution  of  the  Austro- 
Hungarian  Monarchy  is  that  of  1867,  the  year  of  the  political 


326  CENTRAL  EUROPE 

separation  and  peaceable  union  between  Austria  and 
Hungary. 

The  legal  independence  and  territorial  integrity  of  Hungary 
and  its  neighbouring  countries  is  solemnly  declared  by  the 
oath  of  the  sovereign.  In  this  the  older  Hungarian  con- 
stitutions are  recurred  to,  and  especially  the  revolutionary 
legislation  of  1848.  By  this  act  of  separation  two  States, 
themselves  divided  several  times,  arose  with  foundation  and 
superstructure,  each  of  which  already  has  an  imperial  con- 
stitution superior  to  its  provincial  constitutions,  but  which 
have  the  same  monarch,  and  hence  carry  on  certain  joint 
institutions  either  naturally  or  by  means  of  a  treaty.  The 
principal  concerns  of  the  united  State  are  :  the  joint  Ministry 
for  Foreign  Affairs,  the  Imperial  Ministry  for  War  for  all 
matters  relating  to  the  joint  army  and  the  navy  (the  Land- 
wehr  on  both  sides  being  still  maintained),  the  joint 
Ministry  for  Finance  for  joint  expenses,  whilst  the  financial 
systems  are  separate,  a  joint  administration  for  Bosnia  and 
Herzegovina.  The  preUminary  estimate  for  joint  expenses 
is  presented  to  a  meeting  of  the  Delegations  for  deliberation 
(and  to  be  passed),  which  meeting  consists  of  deputations 
from  the  parUaments  of  both  sides. 

Germans  of  the  Empire  frequently  compare  the  sessions 
of  the  Delegations  with  the  German  Reichstag,  but  this  is  a 
mistake.  Each  half  of  the  Empire  sends  sixty  representa- 
tives, one-third  of  whom  are  chosen  from  the  House  of 
Lords  {Herrenhaus)  or  Table  of  Magnates  respectively.  The 
sessions  are  public  and  not  joint,  since  each  Delegation 
discusses  in  its  native  language.  The  intercourse  between 
the  Delegations  is  in  writing.  Differences  of  opinion,  if 
written  communications  have  been  exchanged  three  times 
without  agreement  resulting,  are  settled  in  a  joint  full 
session  by  voting  without  debate.  The  speech  from  the 
throne  is  given  twice,  in  German  and  Magyar.  It  is  obvious 
that  this  machinery  is  not  formed  to  produce  joint  political 
feeling,  but  that,  on  the  contrajy,  it  is  arranged  to  settle  the 
necessary  joint  business  with  the  least  conceivable  mutual 
contact. 


STATISTICAL  AND  HISTORICAL  327 

The  agreements  at  present  valid  between  Austria  and 
Hungary  date  from  December  1907  and  last  till  Decem- 
ber 31,  1917.  They  include  the  determination  of  the 
contribution  obUgatory  on  both  sides  (Beitragspflicht)  and 
the  customs  and  commercial  treaty.  The  collection  and 
administration  of  the  customs  is  still  left,  within  the  frontiers 
of  the  States  in  question,  to  the  Governments  of  the  two 
parties  concluding  the  treaty.  Inspectors  are  appointed  by 
both  sides  for  the  mutual  supervision  of  the  customs  admini- 
stration, and  they  have  the  right  to  examine  the  business 
routine  in  the  said  administration  in  the  other  State.  There 
is  a  Court  of  Arbitration  for  disputed  questions. 

Bosnia  and  Herzegovina  were  taken  into  the  joint  customs 
union  in  1879.  In  this  respect  nothing  was  altered  by  the 
declaration  of  the  hereditary  sovereignty  of  the  Imperial 
house  in  1908.  The  administration  there  is  inspected  by 
Austria  and  by  Hungary. 

Central  European  treaties  are  prepared  by  the  joint 
Foreign  Office,  but  must  be  passed  by  the  separate  national 
representative  bodies.  Hence  it  is  true  to  say  :  we  do  not 
know  exactly  whether  we  have  to  deed  with  one  or  with  two 
States. 


CHAPTER  X 
BIBLIOGRAPHY 

In  the  following  pages  books  and  pamphlets  are  mentioned 
from  which  Austrians  and  Hungarians  can  learn  to  know 
the  policy  of  the  German  Empire,  and  the  Germans  of  the 
Empire  can  learn  to  know  that  of  Austria-Hungary.  The 
list  of  Austro-Hungarian  Uterature  is  borrowed  from  Richard 
Charmatz,  the  author  of  the  Wegweiser  durch  die  Literature 
der  osterreichischen  Geschichte  (Stuttgart,  Cotta,  1912),  and  is 
published  in  the  Hilfe  (No.  23,  1915).  The  list  for  the 
German  Empire  has  been  compiled  for  the  purpose  by  a 
group  of  competent  men  and  women  as  an  aid  to  a  Central 
European  rapprochement.  In  both  cases  many  books  have 
of  course  been  omitted  which  might  equally  well  have  been 
included.  The  choice  made  in  particular  cases  may  always 
be  called  in  question,  since  the  value  of  a  book  always  differs 
according  to  the  reader's  taste  and  type  of  education,  and 
since  in  various  places  writings  of  lesser  merit  must  be 
mentioned  because  no  better  ones  existed  or  were  known. 
The  few  notes  interspersed  are  borrowed  from  Herr  R. 
Charmatz  in  the  case  of  the  Austro-Hungarian  hst,  and  are 
by  me  in  the  case  of  the  German  Hst.  They  are  only 
intended  to  give  hints  as  to  the  use  of  the  books. 

Austro-Hungarian  Literature 

For  those  who  cannot  devote  too  much  time  to  the  study 
of  Austria-Hungary  we  must  first  mention  the  most  important 
books  and  those  writings  which  give  a  survey.  The  follow- 
ing, especially,  will  facilitate  a  knowledge  of  the  events  in 
the  nineteenth  century  : 

328 


BIBLIOGRAPHY  329 

Anton  Springer,  Geschichte  Osterreichs  seit  dem  Wiener 
Frieden,  1809,  2  vols.,  Leipzig,  1863  and  1865.  (Goes 
down  to  1849.) 

Heinrich  Fried jung,  Der  Kampf  um  die  Vorherrschaft  in 
Deutschland,  1859-1866,  2  vols.,  9tli  edition.  Cotta, 
Stuttgart.    (A  monumental  Austrian  work.) 

Heinrich  Friedjung,  Osterreich  von  1848-1860.  Hitherto 
2  vols.,  several  editions.  Cotta,  Stuttgart.  (Very  arrest- 
ing and  informative.) 

Two  books  published  in  the  collection  Aus  Natur  und 
Geisteswelt  supply  a  brief  survey  : 

Richard  Charmatz,  Geschichte  der  auswdrtigen  Politik  Oster- 
reichs im  19.  Jahrhundert,  2  vols.     Leipzig. 

Richard  Charmatz,  Osterreichs  innere  Geschichte  von  1848 
his  1907,  2  vols.,  2nd  edition.     Leipzig. 

The  following  are  mentioned  for  an  explanation  of  foreign 
policy  : 

Heinrich  Friedjung,  Der  Krimkrieg  und  die   osterreichische 

Politik,  2nd  edition.     Cotta,  Stuttgart. 
Eduard  von  Wertheimer,  Graf  Julius  Andrassy,  Sein  Leben 

und    seine   Zeit,    3    vols.     Stuttgart,    1913.     (Also    of 

importance  for  Hungarian  home  policy.) 
Theodor  von  Sosnosky,  Die  Balkanpolitik  Osterreich-Ungarns 

seit  1866,  2  vols.     Stuttgart,  1913  and  1914. 

For  an  understanding  of  the  political  tendencies  and 
national  theories  the  following  books  are  useful : 

Rudolf     Springer,    Grundlagen     und    Entwicklungziele    der 

osterreichisch-ungarischen    Monarchic.      Vienna,     1906. 

(An  excellent  book.) 
Rudolf  Springer,  Der  Kampf  der  osterreichischen  Nationen 

um  den  Staat,  Part  I.     Vienna,  1902. 
Otto'Bauer,  Die  Nationalitdtenfrage  und  die  Sozialdemocratie. 

Vienna,   1907.     (Later  a  popular  edition  also.     Much 

historical  material.) 


330  CENTRAL  EUROPE 

Aurel    C.    Popovici,    Die    Vereinigten    Staaten   von    Grosz- 

Osterreich.     Leipzig,  1906. 
Paul  Samassa,  Die  Volkerstreit  im  Habsburger  Staat.     Leipzig, 

1910. 

In  addition  these  older  books  : 

Paul  Dehn,  Deutschland  nach  Osten,  vols.  2  and  3  ;  Osterreich- 
Ungarn  in  reichsdeutschem  Licht,  2  parts.  Munich,  1888 
and  1890. 

Adolf  Fischhof,  Osterreich  und  die  Burgschafien  seines 
Bestandes.     Vienna,  1869. 

Joseph  Freiherr  von  Cotvos,  Die  Nationalitdtenfrage.  Buda- 
pest, 1865. 

Finally : 

Richard  Charmatz,  Deutsch-osterreichische  Politik.  Studien 
uber  den  Liberalismus  und  iiber  die  auswdrtige  Politik. 
Leipzig,  1907. 

On  the  constitution  and  constitutional  history : 

Alfons  Huber,  Osterreichische  Reichsgeschichte.     Vienna,  1895. 
Ludwig    Gumplowicz,    Das    osterreichische   Staatsrecht,    3rd 

edition.     Vienna,  1907. 
Heinrich  Rauchberg,  Osterreichische  Biirgerkunde.     Vienna, 

pubHshed  by  Tempsky. 

Statistical : 

A.  L.  Hickmann,  Geographisch-statistischer  TaschenaUas  von 
Osterreich-Ungarn.    Vienna,  publisher,  Freytag. 

Osterreichisches  statistisches  Handbuch.  Issued  by  the 
Central  Imperial  Statistical  Commission  (i  vol. 
annually).    Vienna,  published  by  Ceroid. 


Some  works  are  now  mentioned  which  treat  of  longer 
periods  of  time  or  of  individual  persons,  and  which  will 
serve  to  deepen  preUminary  knowledge.  Among  general 
accounts  of  Austrian  history  the  following  may  be 
noticed : 


BIBLIOGRAPHY  331 

Franz  Martin  Mayer,  Geschichte  Osterreichs  mit  besonderer 
Riicksicht  auf  das  Kulturleben,  2  vols.,  3rd  edition. 
Vienna,  1909.     (Good  comprehensive  account.) 

Richard  Kralik,  Osterreichische  Geschichte,  3rd  edition. 
Vienna,  1914.     (Clerical  conservative  view  of  events.) 

In  addition  : 

Franz  Krones,  Geschichte  der  Neuzeit  Osterreichs  vom  18. 
Jahrhundert  bis  auf  die  Gegenwart.  Berlin  1879.  (Also 
vol.  iv.  of  the  same  author's  Handbuch  der  Geschichte 
Osterreichs.) 

H..  von  Zwiedineck-Siidenhorst,  Deutsche  Geschichte  von  der 
Auflosung  des  alten  bis  zur  Errichtung  des  neuen  Kaiser- 
reiches  (1806-1871),  3  vols.  Cotta,  Stuttgart,  1897, 
1903,  1905. 

For  Hungary : 

Michael  Horvath,  Kurzgefaszte  Geschichte  Ungarns,  2  vols. 

Budapest,  1863.     (Goes  down  to  1848.) 
Eugen  Csuday,  Die  Geschichte  der  Ungarn,  2  vols.     Vienna, 

1898. 

Further  : 

Michael  Horvath,  Geschichte  des  Unabhdngigkeitskrieges  im 
Ungarn,  1848-1849,  3  vols.,  2nd  edition.  Budapest,  1872. 

Michael  Horvath,  25  Jahre  aus  der  Geschichte  Ungarns, 
1825-1848,  2  vols.     Leipzig,  1867. 

Heinrich  Marczali,  Ungarische  Verfassungsgeschichte.  Tiibin- 
gen,  1910. 

Joseph  von  Jekelfalussy,  Der  tausendjdhrige  ungarische  Stoat 
und  sein  Volk.  Issued  by  order  of  the  Himgarian 
Ministry  of  Commerce.     Budapest,  1896. 

Detached  periods  of  time  : 

Adam  Wolf  and  Hans  von  Zwiedineck-Siidenhorst,  Oster- 
reich  unter  Maria  Theresa,  Josef  II.  und  Leopold  II. 
(From  Oucken,  Augemeine  Geschichte  in  Einzeldarstel- 
lungen.    Berlin,  1884.) 


332  CENTRAL  EUROPE 

H.    von    Zwiedineck-Siidenhorst,    Maria    Theresa    {Mono- 

graphien  zur  Weltgeschichte).     Velhagen  and  Klasing. 
Johann  Wendrinsky,  Kaiser  Josef  II.     Vienna,  1880. 
A,  Dove,  Ausgewdhlte  Schriften.     Leipzig,  1898.     (Contains 

memoirs  on  Maria  Theresa  and  Kaunitz.) 
August  Fournier,  Historische  Studien  und  Skizzen,  3  vols. 

Prague,   1885  ;    Vienna,   1908  and  1912.     (Many  con- 
tributions  relating   to    the   times    of   Maria   Theresa, 

Josef  II.,  Napoleon  and  Metternich.) 
Eduard  Wertheimer,  Geschichte  Osterreichs  und  Ungarns  im 

ersten  Jahrzehnt  des  19.  Jahrhunderts,  2  vols.      Leipzig, 

1884  and  1890. 
Ernst  Viktor  Zenker,  Die  Wiener  Revolution  1848  im  ihren 

sozialen    Voraussetzungen    und    Beziehungen.    Vienna, 

1897. 
Maximilian  Bach,  Geschichte  der  Wiener  Revolution  im  Jahre 

1848.     Vienna,    1898.     (Social    Democratic    point    of 

view.) 
Joseph    Alexander    Freiherr    von    Helfert,    Geschichte    der 

osterreichischen     Revolution    im    Zusammenhange    mit 

der  mitteleuropdischen   Bewegung,  2  vols.    Freiburg    in 

Breisgau,  1907  and    1908.     (Goes  down  to  June  1848. 

Conservative  point  of  view.) 
Friedrich  Schiitz,  Werden  und  Wirken  des  Bilrgerministeriums. 

Leipzig,  1909.     (Feuilletons.) 
Walter   Rogge,   Osterreich  von   Vilagos   bis  zur  Gegenwart, 

3  vols.     Leipzig,  1872,  1873. 
Walter  Rogge,   Osterreich  seit  der  Katastrophe  Hohenwart- 

Beust,    2    vols.     Leipzig,    1879.     (Rogge's    books    are 

badly  arranged  and  full  of  prejudice.) 
Gustav   Kolmer,  Parlament  und   Verfassung  in  Osterreich, 

8   vols.     Vienna,    1902-14.     (Covers   the   years    1861- 

1904.) 

The   following   give   information   about   civilisation   and 
social  Ufe  : 

Gustav  Strakosch-Grassmann,  Geschichte  des  osterreichischen 
Unterrichtswesens.     Vienna,  1905. 


BIBLIOGRAPHY  333 

Ludwig  Hevesi,  Osferreichische  Kunsi  im  19.  Jahrhundert, 

2  parts.     Leipzig,  1903.     (From  Geschichte  der  modernen 

Kunst.) 
J.  W.  Nagl  and  J.  Zeidler,  Deutsch-osterreichische  Literaturge- 

schichte,  2  vols.     Vienna,  1896-1915. 
K.   Griinberg,  Die  Bauernbefreiung  und  die  Auflosung  des 

Gutsherrlich-bduerlichen  Verhdltnisses  in  Bohmen,  Mdhren 

und  Schlesien,  2  parts.     Leipzig,  1894. 
Heinrich  Waentig,  Gewerbliche  Mittelstandspolitik.     Leipzig, 

1898.     (Based  on  Austrian  sources.) 
Julius  Deutsch,  Geschichte  der  osterreichischen  Gewerkschafts- 

bewegung.     Vienna,  1908. 
Georg  Loesche,  Geschichte  des  Protestantismus  in  Osterreich. 

Tubingen,  1902.     (This  excellent  little  booklet  gives  a 

bibliography  at  the  end  for  the  important  period  of  the 

Reformation  and  Counter-Reformation.) 
Georg  Loesche,  Von  der  Toleranz  zur  Paritdt  in  Osterreich, 

1781-1861.     Leipzig,  1911. 

For  commercial  policy  the  following  must  be  mentioned : 

Adolf  Beer,  Die  osterreichische  Handehpolitik  im  19.  Jahr- 
hundert.    Vienna,  1891. 

Ludwig  Lang,  Hundert  Jahre  Zollpolitik  1805-1905.  Trans- 
lated from  the  Magyar.     Vienna,  1906. 

4:  *  *  4c  )|c  * 

Biographies  or  memoirs  of  the  most  important  personalities 
are  given  in  alphabetic  order ;  some  knowledge  of  the 
history  will  make  it  possible  to  understand  the  volumes 
which  come  under  consideration  for  special  departments  of 
interest. 

Friedrich  Ferdinand  Graf  von  Beust,  .4ms  drei  Viertel-Jahr- 
hunterten.  1866  bis  1885,  vol.  ii.     Stuttgart,  1887. 

Oskar  Criste,  Das  Buch  vom  Erzherzog  Carl.  Vienna,  1914. 
(Popular  abridgment  of  the  big  three-volume  bio- 
graphy.) 

Gustav  Steinbach,  Franz  Deak,  Eine  Biographie.  Published 
by  Manz,  Vienna,  1888. 


334  CENTRAL  EUROPE 

Karl    Ritter   von    Landmann,    Prinz   Eugen  von  Savoyen. 

(From  Weltgeschichte  in  Characterbildern).   Munich,  1905. 
Heinrich  von  Sybel,  Prince  Eugen.     Munich,  1861. 
Richard  Charmatz,  Adolf  Fischof.     Cotta,  Stuttgart,  1910. 
Arthur  Gorgei,  Mein  Leben  und  Wirken  in  Ungarn  in  dem 

Jahren  1848  und  1849,  2  vols.     Leipzig,  1852. 
F.  von  Krones,  Moritz  von  Kaiserjeld.     Leipzig,  1888. 
Ludwig  Kossuth,  Meine  Schriften  aus  der  Emigration,  3  vols. 

Pressburg,  1880  and  1882. 
K.  Th.  Heigel,  Essays  aus  neuerer  Geschichte.   Bamberg,  1892. 

.(Essays  about  Metternich.) 
Aus  Metternichs  nachgelassenen  Papier  en.     Edited  by  Prince 

Richard  Metternich- Winneburg.     Vienna,  1880.     (Vol  i. 

of  this  four-volumed  work  contains  the  autobiographical 

notes  of  the  Chancellor  of  State.) 
Feldmarschall  Graf  Radetzky,  Eine  biographische  Skizze  nach 

den  eigenen  Diktaten.     By  an  Austrian  Veteran.     Cotta, 

Stuttgart,  1858. 
C.  Wolf sgruber,  Joseph  Othmar  Kardinal  Rauscher.     Freiburg 

in  Breisgau,  1888. 
Albert   Eberhard   Friedrich   Schaffle,   Aus   meinem   Leben, 

2  vols.     Berhn,  1905. 
Hugo  Kerchnawe  and  Alois  Veltze,  Feldmarschall  Karl  Fiirst 

zu  Schwarzenberg.    Vienna,  1913. 
A.  F.  Berger,  Felix  Fiirst  zu  Schwarzenberg,  k.k.  Minister- 

prdsident.     Leipzig,  1853. 
Adolf  Beer,  Aus  Wilhelm  von  Tegetthoffs  Nachlasz.     Vienna, 

1882. 
L.    von   Ranke,    Geschichte   Wallensteins.    Leipzig,  several 

editions. 


The  relations  of  individual  nations  to  each  other  and  to 
the  State  are  of  the  greatest  importance.  Although  the 
pamphlet  Uterature  is  so  extensive  there  is  yet  a  lack  of 
comprehensive  single  presentations  giving  full  informa- 
tion. 


BIBLIOGRAPHY  335 

First  of  all  we  may  perhaps  refer  to  the  compilation  : 

Die  Volker  Osterreich-Ungarns,  Ethnographische  und  kultur- 
historische  Schilderungen,  12  vols.  Vienna,  1881,  etc. 
(Special  portions  of  it  are  quite  applicable  even  to-day.) 

Further  may  be  mentioned  : 

Ludwig    Schlesinger,     Geschichte    Bohmens,     2nd    edition. 

Prague,  1870.     (A  detailed  account  only  up  to  the  end 

of  the  eighteenth  century.) 
Teutsch,  G.  D.,  Geschichte  der  Siebenbilrger  Sachsen,  2  vols., 

3rd  edition.     Kronstadt,  1899.     (The  third  volume  is  a 

continuation  by  Fr.  Teutsch  up  to  1815.     Kronstadt, 

1910.) 
Raimund  Fr.  Kaindl,  Geschichte  der  Deutschen  in  Ungarn. 

Gotha,  1912. 
Alfred  von  Skene,  Entstehen  und  Entwickelung  der  slawisch- 

nationalen  Bewegung  in  Bohmen  und  Mdhren  in   19. 

Jahrhundert.    Vienna,  1893. 
Wilhelm  Kosch,  Die  Deutschen  in  Osterreich  und  ihr  Ausgleich 

mit  den  Tschechen.     Leipzig,  1909. 
Max  Menger,  Der  hohmische  Ausgleich.     Stuttgart,  1891. 
Karl  Tiirk,  Bohmen,  Mdhren  und  Schlesien.     (From  the  col- 
lection :  Der  Kamf  um  das  Deutschtum.)     Munich,  1898. 
Heinrich    Rauchberg,    Die    Bedeutung    der    Deutschen    in 

Osterreich.     (From  Neue  Zeit-und  Streitfragen.)  Dresden, 

1908. 
R.  W.  Seton-Watson  (Scotus  Viator),  Die  sildslavische  Frage 

im  Habshurger  Reiche.     BerUn,  1913. 
Herm.  Jg.  Bidermann,  Die  Italiener  im  Tiroler  Provinzial- 

verbande.     Innsbruck,  1874. 
Gregor  Kupzanko,  Das  Schicksal  der  Ruthenen.    Leipzig, 

1887. 
Roman     Sembratowycz,    Polonia    inedenta.     Frankfurt-on- 

Main,  1907. 

In  addition  the  collection  of  material : 

Alfred  Fischer,  Das  osterreichische  Sprachenrecht,  2nd  edition. 
Briinn.     PubUshed  by  Irrgang. 


336  CENTRAL  EUROPE 


Literature  for  the  German  Empire 

We  leave  aside  intentionally  the  older  German  histories 
and  hence  pass  over  the  great  works  of  Ranke,  Raumer, 
Giesebrecht,  Ritsch,  Hausser,  Schlosser,  Lamprecht  and 
others.  Similarly  we  pass  over  also  the  political  dictionaries 
and  almost  all  properly  specialist  literature. 

The  previous  history  and  the  history  of  the  German 
Empire  is  not  to  be  found  complete  in  any  single  book,  since 
the  greatest  historical  works  of  modern  times  are  those  that 
deal  only  with  sections  of  the  subject.  We  may  consider 
the  following  as  complete  accounts  : 

Heinrich  v.   Treitschke,  Deutsche  Geschichte  im  19.   Jahr- 

hundert,   5   vols.     Leipzig,    1908-13,    S.    Hirzel.     (The 

chief  work  on  the  preparatory  period ;   goes  down  to 

1848.) 
Br.  Gebhardt,  Handbuch   der  deuischen  Geschichte,  2  vols, 

5th  edition.     Stuttgart,  1913,  Union,  Deutsche  Verlags- 

gesellschaft. 
D.  Schafer,  Deutsche  Geschichte,  2  vols.,  4th  edition.     Jena, 

1914,  S.  Fischer.     (International  politics.) 
G.  Egelhaaf,  Geschichte  der  neuesten  Zeit  vom  Frankfurter 

Frieden  his  zur  Gegenwart,  5th  edition.     Stuttgart,  1915, 

C.  Krabbe.     (Much  intelligible  detailed  material.) 
G.    Kaufmann,  Politische   Geschichte  Deutschlands    im    19. 

Jahrhundert.     Berlin,  1912,  G.   Bondi.     (National  and 

liberal.) 
R.  Schwemer,  Vom  Bund  zum  Reich,  2nd  edition.     Leipzig, 

1912,     B.   G.   Teubner.     {Aus  Natur  und  Geisteswelt, 

vol.  102.) 
Schulthess,  Europdischer  Geschichtskalender.     Munich,  C.  H. 

Beck. 
Wippermann,  Deutscher  Geschichtskalender.     Leipzig,  Felix 

Meiner. 
Dahlmann-Waitz,    Quellenkunde    der    deutschen    Geschichte, 

8th  edition.     Leipzig,  1912,  F.  K.  Koehler, 


BIBLIOGRAPHY  337 

Statistisches  Jahrbuch  fiir  das  Deutsche  Reich.  Issued  by  the 
Imperial  Department  of  Statistics.  Berlin,  Puttkam- 
mer  and  Miihlbrecht.  (The  most  interesting  book 
about  Germany.) 

The  following  relate  to  the  previous  history  of  the  founda- 
tion of  the  Empire  : 

Die  Befreiung  1813,  1814.  1815.  Urkunden,  Berichte  und 
Briefe.  Diisseldorf-Ebenhausen,  W.  Langewiesche. 
(Clear,  popular.) 

1848,  Der  Vorkampf  deutscher  Einheit  und  Freiheit.  Urkun- 
den, Berichte  und  Briefe.  Diisseldorf-Ebenhausen,  W. 
Langewiesche.     (The  same.) 

G.  MoUat,  Reden  und  Redner  des  ersten  Deutschen  Parla- 
ments.  Osterwieck,  1895,  A.  W.  Zickfeld.  (Good 
introduction  into  the  spirit  of  1848.) 

Fr.  Meinecke,  WeltbUrgertum  und  Nationalstaat,  2nd  edition. 
Munich,  1911.  R.  Oldenbourg.  (Very  valuable  for 
the  distinction  between  the  "  Greater  Germany  "  and 
the  "  Lesser  Germany  "  parties.) 

W.  Maurenbrecher,  Griindung  des  Deutschen  Reiches  1859- 
1871,  4th  edition.     Leipzig,  1910,  C.  C.  M.  Pfeffer. 

H.  V.  Sybel,  Begrunding  des  Deutschen  Reiches  durch 
Wilhelm  I.  Popular  edition,  7  vols.,  3rd  edition. 
Munich,  1913.  R.  Oldenbourg.  (The  chief  book  for 
the  Bismarckian  period.     Rather  lengthy.) 

The  literature  relating  to  Bismarck  is  very  extensive.     We 
mention  only  the  principal  works  : 

Gedanken  und  Erinnerungen,  edited  by  H.  Kohl,  popular 
edition,  2  vols.  Stuttgart,  1915,  Cotta  Nachf.  New 
large  octavo  edition,  2  vols.  (The  vital  book  for 
German  politics.) 

Bismarck's  Gesammelte  Reden  mit  verbindlich  Geschichtlichen 
Darstellungen,  by  Ph.  Stein,  13  vols.  Leipzig,  1895-99, 
Ph.  Reclam. 

Heinr.  v.  Poschinger,  Preussen  im  Bundestag  1851-1859. 
Documents  of  the  Royal  Prussian  Bundestag-Gesand- 


338  CENTRAL  EUROPE 

schaft,  edited  by  H.  Poschinger,  4  parts,  2nd  edition. 
Leipzig,  1882-84,  S.  Hirzel.  (Poschinger' s  other  collec- 
tions also  come  under  consideration.) 
Heinr.  Friedjung,  Der  Kampf  um  die  Vorherr schaft  in 
Deutschland,  1859-1866,  2  vols,  9th  edition.  Stuttgart, 
1912  and  1913,  Cotta  Nachf.  (This  briUiant  Austrian 
work  relates  also  to  the  history  of  the  German  Empire.) 

For  the  post-Bismarckian  period  the  following  may  be 

mentioned  : 

Karl  Lamprecht,  Deutsche  Geschichte  der  jungsten  Vergangen- 
heit  und  Gegenwart,  vols.  i.  and  ii.  Geschichte  der 
wirthschaftlichen  und  sozialen  Entwicklung  in  den  yoer- 
goer  Jahren  des  19.  Jahrhunderts,  Geschichte  der  inneren 
und  dusseren  Politik  in  den  70-90  Jahren  des  19.  Jahr- 
hunderts, 5th  edition.  BerUn,  1912  and  1915,  Weid- 
mann. 

Fiirst  Hohenlohe-Schillingsfiirst,  Denkwurdigkeiten,  edited 
by  Fr.  Curtius  under  the  direction  of  Prince  Al.  zu 
Hohenlohe-Schillingsfiirst,  2  vols.  Stuttgart,  1906. 
Deutsche  Verlagsanstalt,  2  vols,  cheap  edition,  1914. 
(Recollections  of  the  third  Imperial  Chancellor.) 

Fiirst  Biilow,  Reden,  4  vols.  Leipzig,  1914,  Ph.  Reclam. 
(Quite  interesting  as  supplementary  reading.) 

Deutschland  unter  Kaiser  Wilhelm  II.,  3  vols.  BerUn,  1914, 
Reimar  Hobbing.     (A  many-sided  compilation.) 

Imperial  constitution  and  administration,  statistical : 

Graf  Hue  de  Grais,  Handbuch  der  Verfassung  und  Verwaltung 
in  Preussen  und  des  Deutschen  Reiches,  22nd  edition. 
Berlin,  19 14,  Springer.  (Practical,  a  much  used  hand- 
book.) 

P.  Laband,  Deutsches  Reichstaatsrecht,  6th  edition.  (Collec- 
tion :  Das  offentl.  Recht  der  Gegenwart.)  Tiibingen,  1912, 
J.  C.  B.  Mohr. 

C.  Loening,  Reichsverfassung,  4th  edition.  (Collection  :  Aus 
Natur  und  Geisteswelt,  vol.  34.)  Leipzig,  1913,  B.  G. 
Teubner. 


BIBLIOGRAPHY  339 

Der    deutsche    Staatshurger,    2nd    edition.     Leipzig,    1912, 
C.  E.  Poeschel.     (Easily  understood  civic  information.) 


Only  a  scanty  selection  can  be  offered  in  regard  to  the 
federated  States  of  the  German  Empire.     For  Prussia  : 

W.  Pierson,  Preussische  Geschichte,  2  vols.,   loth  edition. 

Berhn,  1910,  Gebr.  Paetel. 
O.  Hintze,  Die  Hohenzollern  und  ihr  Werk,  500  Jahre  vater- 

Idndischer  Geschichte.     Berhn,  1915,  P.  Parey. 
Gerh.  Anschiitz,  Die  Verfassungsurkunde  fiir  den  Preuss. 

Staat,    2    vols.     Berhn,    1912,    O.    Haring.     (Detailed 

commentary.) 
A.   Amdt,   Die   Verfassungs-Urkunde  fiir  den  Preussischen 

Staat,  7th  edition.     Berhn,  1911,  J.  Guttentag.     (With 

short  explanations.) 
C.  Bornhak,  Grundriss  des  Verwaltungsrechts  in  Preussen, 

4th  edition.     Leipzig,  1912,  Deichert  Nachf. 
Staiistisches  Jahrbuch  des  Preussischen  Staates,  issued  by  the 

Prussian  Royal  Statistical  Department,  Berlin. 

To  the  Prussian  books  we  add  some  German  Imperial 
Polish  hterature  : 

Ludwig  Bemhard,  Die  Polenfrage,  Das  polnische  Gemein- 

wesen  im  Preuss.  Staat.     2nd  edition.     Munich,  Leipzig, 

1910.     Duncker  and  Humblot.     (Impressive  essays.) 
Gg.  Cleinow,  Die  Zukunft  Polens,  vol.  i.  Wirthschaft,  vol.  ii. 

Politik.     Leipzig,    1908    and    1914,    Fr.    W.  Grunow. 

(Much  material,  poorly  arranged.) 
Die  Deutsche  Ostmark,  issued  by  the  Deutschen  Ostmarken- 

verein.     Lissa,    1913,    O.    Euhtz.     (Polemical    writing 

against  Poland.) 
C.  Brandenburger,  Polnische  Geschichte.     Leipzig,  Goschen. 

(Goschen  Collection,  338.) 

For  the  constitution  and  situation  in  the  larger  federated 
3tat.es  the  following  are  instructive  : 


340  CENTRAL  EUROPE 

F.  Stoerk  and  F.  W.  Rauchhaupt,  Handbuch  der  deutschen 

Verfassungen,  2nd  edition.     Leipzig,  1913,  Duncker  and 

Humblot.     (Gives  the  constitutions  of  all  the  individual 

States.) 
Karl  Braun,  Aus  der  deutschen  Kleinstaaterei,  Randglossen  zu 

den  politischen  Wandlungen  der  letzten  Jahre.     Aus  den 

Papier  en  eines  deutschen  Ahgeordneten.     Bromberg,  1878. 

(Cheerful,  interesting  reminiscences.) 
C.  Brandenburg,  Der  Eintritt  der  silddeutschen  Staaten  in  den 

Norddeutschen  Bund.     Berlin,  1910,  Gebr.  Paetel. 
H.  Ockel,  Bayerische  Geschichte.     Leipzig,  Goschen.  (Goschen 

Collection,  160.) 
Th.    Flathe,    Geschichte    des    Kurstaates    und    Konigreichs 

Sachsen,    3    vols.,    2nd    edition.     Gotha,    1867-1873, 

Fr.  A.  Perthes. 
O.  Kammel,  Sachsens  Geschichte.  Leipzig,  Goschen.  (Goschen 

Collection,  100.) 
K.    Weller,     Wilrttembergs    Geschichte.     Leipzig,    Goschen. 

(Goschen  Collection,  462.) 
A.  Dove,  Grossherzog  Friedrich  von  Baden  als  Landesherr  und 

deutscher  Fiirst.     Heidelberg,  1902,  C.  Winter. 

In  passing  to  domestic  politics  we  shaU  first  notice  the 
handbooks  of  the  parties  and  political  groups. 

Konservatives  Handbuch.     Berlin,  191 1,  R.  Robbing. 
Politisch-soziales  A. B.C.   Handbuch   fUr  die  Mitglieder  der 

Zentrumspartei.     Stuttgart,  1900,  Siiddeutsche  Verlags- 

buchhandlung. 
Agrarisches    Handbuch.     Berlin,     1911,     Farmers'     Union. 

(Chief  source  of  information  for  the  agrarian  movement.) 
Politisches  Handbuch  der  Naiionalliberalen  Partei.     Berlin, 

1914.     PubUshed    by    the    National    Liberal    Party. 

(Comprehensive.) 
Eugen    Richter,    Politisches   A. B.C.     (Out    of   print.     The 

best  of  the  older  handbooks.) 
Martin    Wenck,    Handbuch   fiir    liberate    Politik.     Berlin- 

Schoneberg,  191 1,  Fortschritt  (publishers  of  the  Hilfe). 


BIBLIOGRAPHY  341 

G.  Gothein,  Agrarpolitisches  Handbuch.  Berlin,  1910,  Lieb- 
heit  and  Thiessen.  (Free  Trade  liberal,  full  of  signifi- 
cance.) 

Handbuch  fiir  sozialdem.  Landtagswdhler.  Berlin,  1913. 
Publishers,  Vorwdrts. 

Handbuch  des  alldeutschen  Verbandes,  i8th  edition.  Munich, 
1915,  Lehmann, 

For  the  history  of  parties  : 

Friedrich  Naumann,  Die  politischen  Parteien  in  Deutschland. 

Berlin,  1911,  Georg  Reimer.     (Figures  out  of  date.) 
F.  Salomon,  Deutsche  Parteiprogramme,  2nd  edition,  vol.  i. 

from    1844-1871,    vol.    ii.    from    1871-1890.     Leipzig, 

B.  G.  Teubner. 

Oskar  Klein-Hattingen,  Geschichte  des  deutschen  Liberalismus, 
cheap  edition,  2  vols.  BerUn-Schoneberg,  1912.  Pub- 
lishers of  the  Hilfe.     (Abundant  historical  material.) 

Oskar  StiUich,  Die  politischen  Parteien  in  Deutschland,  2  vols. 
Vol  i..  Die  Konservativen  ;  vol.  ii.,  Der  Liberalismus. 
Leipzig,  1908  and  1911,  Klinkhardt. 

F.  Mehring,  Geschichte  der  deutschen  Sozialdemokratie,  4  vols., 
4th  edition.  Stuttgart,  1909,  Dietz  Nachf.  (Partisan, 
but  clever.) 

Werner  Sombart,  Sozialismus  und  soziale  Bewegung  in  19, 
Jahrhundert.  Jena,  1908,  G.  Fischer.  (Excellent  in- 
troduction.) 

Hugo  Preusz,  Das  deutsche  Volk  und  die  Politik.     Jena,  1915, 

C.  Diederichs.     (Polit.  Bibl.)      (Valuable  contemporary 
book  of  liberal  poUtics.) 

For  special  departments  : 

August    Pfannkuche,    Staat    und    Kirche.     Leipzig,    1915, 

B.  G.  Teubner. 
W.    V.    Lexis,    Das    Unterrichtswesen   im   Deutschen   Reich, 

4  vols.     BerUn,  1904,  Behrend  and  Co. 
Gertrud     Baumer,    Die     Frau     im     V olkswirthschaft    und 

Staatsleben  der  Gegenwart.     Stuttgart,   1914,  Deutsche 


342  CENTRAL  EUROPE 

Verlagsanstalt.     (Complete  summary  of   the   German 
femininist  movement.) 

Important  books  giving  summaries  on  foreign  politics, 
the  army  and  the  navy  : 

Count    von    Reventlow,    Deutschlands    auswdrtige    Politik 

1888-1913,   2nd  edition.     Berhn,   1914,  C.  S.  Mittler 

and  Son.     (An  important  book  of  the  chronicle  type.) 
Paul     Rohrbach,     Deutschland     unter     den     Weltvolkern, 

4th   edition.     Stuttgart,    1912,   J.   Engelhorns  Nachf. 

(Thoughtful  introduction  to  foreign  pohtics.) 
E.  Zimmermann,  Unsere  Kolonien.     Berlin,  1914,  Ullstein 

and  Co. 
A.  V.  Lobell,  Das  deufsche  Heer.     Stuttgart,  Greiner  and 

Pfeiffer.     {Biicher  des  Wissens,  vol.  92.) 
Nauticus,  Jahrbuch  fur  Deutschlands  Seeinteressen.     Berlin, 

E.  S.  Mittler  and  Son. 

General  economic  poUcy  is  dealt  with  to  suit  the  needs  of 
political  readers  in  : 

Friedrich    Naumann,    Neudeutsche    Wirthschaftspolitik,    3rd 

edition.     Berhn,  1911,  Georg  Reimer. 
Werner    Sombart,    Die    deutsche   V olkswirthschaft    des    19. 

Jahrhunderts,  2nd  edition.     Berhn,  1909,  Georg  Bondi. 

Popular  edition,  1913. 

Commercial  pohcy  : 

W.  Lotz,  Ideen  der  deutschen  Handelspolitik  1860-1891. 
Leipzig,  1892,  Verein  fiir  Sozialpohtik. 

Richard  Calwer,  Jahrbuch  der  Weltwirthschaft.  Jena,  G. 
Fischer. 

Lusensky,  Einfuhrung  in  die  deutsche  Zoll-und  Handels- 
politik. Hanover,  1913,  Helwing.  (Important  for  the 
prehminary  work  for  commercial  treaties.) 

Agrarian  pohcy  : 

A.  Buchenberger,  GrundzUge  der  deutschen  Agrarpolitik, 
2nd  edition.     Berlin,  1899,  P.  Parey. 


BIBLIOGRAPHY  343 

Th.  von  der  Goltz,  Geschichte  der  deutschen  Landwirthschaft, 
vol.  ii.,  Das  19.  Jahrhunderi.  Stuttgart,  1903,  Cotta 
Nachf. 

Die  Deutsche  Landwirthschajt,  bearbeite  v.  Kaiserl.  Statis- 
Hschen  Amt.  Berlin,  1913,  Pultkammer  and  Miihl- 
brecht.     (The  best  contemporary  summary.) 

Industrial  policy : 

Hiibener,  Die  deutsche  Eisenindusirie.     Leipzig,  1913,  G.  A. 

Glockner.     {Handelshochschulbibl. ,  vol,  14.) 
Die  Schwereisenindustrie  im  deutschen  Zollgebiet,  ihre  Entwick- 

lung  und  ihre  Arbeiten.    Stuttgart,  1912,  A.  Schlicke 

and  Co. 
A.    Oppel,    Die    deutsche    Textilindustrie.     Leipzig,     1912, 

Duncker  and  Humblot. 
F.    Baumgarten   and   A.    Meszleny,    Kartelle   und   Trusts. 

Berlin,  1906,  O.  Liebmann. 
Tschierschky,  Kartell  und  Trust.    Leipzig,  B.  G.  Teubner. 

{Aus  Natur  und  Geisteswelt,  522.) 
P.   Krusch,   Die   Versorgung  Deutschlands  mit  metallischen 

Rohstoffen.     Leipzig,  1913,  Beit  and  Co. 
C.  Christiansen,  Chemische  und  Farbenindustrie.     Tubingen, 

1914,  J.  C.  B.  Mohr. 
M.   Levy,   Die   Organisation  und  Bedeutung  der  deutschen 

Elektrizitatsindustrie.     (Contained  in  special  industrial 

reports,  series  8.)     Berlin,  1914,  Georg  Reimer. 

Financial  policy  : 

R.  Helfferich,    Studien  ilber    Geld-und  Bankwesen.     Berlin, 

1900,  J.  Guttentag.     (Out  of  print.) 
R.  Helfferich,  Deutschlands  Volkswohlstand,  1888-1913,  4th 

edition.     Berlin,  1914,  G.  Stilke. 
J.  Riesser,  Von  1848   bis  heute,  Bank-und  Wirthsch-Studie. 

Popular  edition  of  Die  deutschen  Grossbanken  und  ihre 

Konzentration.    Jena,  191 2,  G.  Fischer. 

Social  policy : 

Leopold  von  Wiese,  Einfiihrung  in  die  Sozialpolitik.  Leipzig, 
1910,  G.  Glockner.     {Handelshochschulbibl.,  vol.  8.) 


344  CENTRAL  EUROPE 

H.    Jastrow,    Soziaipolitik    und    Verwaltungs-Wissenschaft. 

Berlin,  1902,  Georg  Reimer.     (Fundamental.) 
Heinr.  Herkner,  Die  Arbeiterf rage,  5th  edition.     Berlin,  1908, 

J.  Guttentag.     (Gives  the  history.) 
A.     Manes,     Sozialversicherung.     Berlin,     G.     J.     Goschen. 

(Goschen  Collection,  267.) 

Of  course  this  is  only  a  very  small  selection  from  the 
abundance  of  national  economic  and  socio-poUtical  literature. 

We  shall  conclude,  like  our  Austrian  colleague,  with  a 
brief  enumeration  of  biographies  and  memoirs,  which  are 
of  importance  for  the  political  history  : 

R.  Koser,  Geschichte  Friedrichs  des  Grossen,  3  vols.,  4th  and 

5th  edition.     Stuttgart,  1912-13,  Cotta  Nachf .     Popular 

edition,  6th  and  8th  edition,  1913.     (Reputable  standard 

work.) 
M.  Lehmann,  Freiherr  von  Stein,  3  vols.     Leipzig,  1902-5, 

S.  Hirzel  (vol  i.  out  of  print.)     (Inner  history  of  the 

wars  of  liberation.) 
H.    Delbriick,    Das    Leben   des    Feldmarschalls    Grafen   R. 

Gneisenau,  2  vols,  in  one  book.     BerUn,  1908,  G.  Stilke. 

(Military  and  contemporary  history.) 
J.   R.   Sepp,   Gorres.     Berlin,  1896,  E.   Hofmann  and  Co. 

[Geisteshelden,  vol.  23.)     (Catholic  romanticist.) 
Friedrich  Meineike,  Radowitz  und  die  deutsche  Revolution. 

Berlin,  1913,  Mittler  and  Son.     (Important  for  1848.) 
L.  Parisius,  Freiherr  Leopold  von  Hoverbeck,  2  vols.     Berlin, 

1900,     J.     Guttentag.      (About    the     older    Prussian 

liberalism.) 
Leopold   von   Gerlach,    Denkwiirdigkeiten   aus   dem   Leben, 

2  vols.     Berlin,  1892.     (The  older  Conservative  BerHn.) 
Karl  Jentsch,   Friedrich  List.     Berhn,   1901,  E.   Hofmann 

and  Co.     (The  prophet  of  the  eastward  extension.) 
A.    Bergengriin,    David   Hausemann.     Berlin,    1901.     (The 

rise  of  modem  capitalism.) 
H.    Oncken,    Lassalle.     Stuttgart,    1904,    Fr.    Frommann. 

(Beginnings  of  Social  Democracy.) 


BIBLIOGRAPHY  345 

R.   Haym,   Das  Leben  Max  Dunckers.    Berlin,   1891,   R. 

Gaertner.     (Liberal  developments.) 
Briefe  von  und  an  Freiherr  W.  E.  Ketteler,  edited  by  J.  M. 

Reich.     Mainz,  1879,   Kirchheim.     (Beginnings  of  the 

Centre.) 
E.    Marcks,    Kaiser     Wilhelm    I.,    Eine    Biographic     6-7 

editions.     Munich,  1910,  Duncker  and  Humblot.     (Poli- 
tical history.) 
Oskar  Klein-Hattingen,  Bismarck  und  seine  Welt,  3  vols. 

Berlin,  Diimmler.    (Critical  liberal  history  of  Bismarck.) 
M.  Lenz,  Geschichte  Bismarcks,  4th  edition.     Munich,  1914, 

Duncker  and  Humblot. 
Veit   Valentin,   Bismarck   und   seine   Zeit.     Leipzig,    1915, 

B.  G.  Teubner.     {Aus  Natur  und  Geisteswelt,  vol.  500.) 
von  Blume,  Moltke.     Oldenburg,  Gerh.  Stalling.     [Erzieher  d. 

preusz.  Heeres,  vol.  i.) 
Ludwig  Bamberger,   Erinnerungen,  edited  by  P.   Nathan. 

BerUn,    1899,    G.    Reimer.     (Economic    policy  before 

1866.) 
H.  Oncken,  Bennigsen,  Ein  liberal  nationaler  Politiker,  2  vols. 

Stuttgart,  1909,  Deutsche  Verlagsanstalt.     (Rise  of  the 

National  Liberal  party.) 
Ed.    Hiisgen,   Ludwig   Windthorsi,  Sein  Leben,   seine  Zeit. 

Illustrated  popular  edition,  7-16  thousand.     Cologne, 

1911,  J.  P.  Bachem.     (The  leader  of  the  Centre.) 
D.    V.     Oertzen,    Stacker,    Lebensbild    und    Zeitgeschichte. 

Popular    edition.     Schwerin,    1914,    Fr.    Bahn.     (The 

Christian  Sociahst  leader.) 
Eugen  Richter,  Im   alter  Reichstage,  Erinnerungen,  2  vols. 

Berlin,  1895  (out  of  print).     (The  progressive.) 
August  Bebel,  Aus  meinem  Leben,  3  parts,  2nd  edition. 

Stuttgart,  1911-14,   Dietz  Nachf.     (The  Social-Demo- 
crat.) 


With  these  memorials  of  notable  men  we  conclude  our 
work.  They  have  done  what  they  could.  Let  us  do  what 
we  can  and  ought  ! 


INDEX 


Agadir  incident,  191 1,  29 
Agricultural  output : 

Austria-Hungary,  131  et  seq. 

Various  States,  table,  303,  304 
Alexander  I.  of  Russia,  50 
Alkali  monopoly  in  Germany,  159 
Andrassy,  Count  Julius,  23,  57,  58, 

59.  93.  329 
Anschiitz,  Gerhardt,  339 
Anti-Semitism,  144 
Army  in  Central  Europe,  effective 

force  of,  289 
Army  legislation  in  Germany  and 

Austria-Hungary,  278 
Amdt,  A.,  41,  322,  339 
Austria-Hungary  : 

Agricultural    output    of,    131, 

132,  304 
Ausgleich  of  1867,  169  et  seq., 

254,  270 
Balkan  and  Turkish  interests, 

198 
Bibliography  on,  328 
Business  spirit  in,  125 
Central  Europe,  see  that  Title 
Constitution,     historical     ac- 
count, 269,  325 
Economic  post-war  policy,  168 
Economic  relations,   statistics, 

310,  311 
Educational  influences,  128 
Emigration  question,  127 
Foreign  affairs,  281 
Germans  in   Austria,   position 

of,  lOI 
Imports  and  exports,  318 
Labour  reforms,  129 
Magyar  language,  use  of,  94 
Nationalities,  method  of  hand- 
ling, 26,  79 
Parliament  not  summoned  in 

1914.  103 
Pohtical  pessimism,  28 
Population  statistics,  289,  292 


Austria-Hungary  {continued) : 
Poverty  in,  126,  127 
PubUc  services,  reform  of,  130 
Rehgious  struggles  from  1517, 

69 
Social  democracy  in,  104 

See  also  Germany  and  Aus- 
tria-Hungary 

Bach,  MaximiUan,  332 

Baumer,  Gertrud,  341 

BaUin,  123 

Bamberger,  Ludwig,  345 

Barth,  Theodor,  226 

Bauer,  Otto,  329 

Baumgarten,  F.,  41,  343 

Bavaria : 

Mihtary  affairs  of,  278 
Union   with   North   Germany, 
142 

Bebel,  August,  123,  345 

Beer,  Adolf,  333,  334 

Belgium  : 

Agricultural  statistics,  303 
Colonial  possessions,  314 
Educational  system,  301 
International  trade,  307 
Joint-stock  capital,  305 
Population  statistics,  292,  315 
Trade-union  membership,  303 

Bergengriin,  A.,  344 

Berger,  A.  F.,  334 

Berlin  as  the  central  money  market 
for  Mid-Europe,  264 

Berhn  Congress,  1878,  58 

Bemhard,  Ludwig,  339 

Beust,  Frederick  F.,  Count  von,  93, 

333 

Bibhography,  328 

Bidermann,  H.  J.,  335 

Birth-rate  in  Central  Europe,  statis- 
tics, 291 

Bismarck,  i,  9,  11,  21,  35,  36,  38, 
42,  51,  52,  120,  123,  224,  269 


347 


34S 


INDEX 


Bismarck  {continued) : 

Austria-Hungary,     Bismarck's 

policy,  15,  22.  54,  56 
"  Thoughts  and  Recollections," 
18,  40 
Blockade   by    England,    discussion 

of,  148  et  seq. 
Bliicher,  11 
Blume,  von,  345 
Bornhak,  C,  339 
Bosnia  and  Herzegovina,  327 
Brandenburger,  C,  339,  340 
Braun,  Karl,  340 
Brentano,  Luigi,  226 
Biilow,  Prince,  338 
Buchenberger,  H.,  342 
Business    spirit    in    Germany    and 
Austria,  124  cf  seq. 

Calvin,  70 
Calwer,  Richard,  342 
Canisius,  71 

Capitalism    in    England    and    Ger- 
many, 113 
Cartels    and     federations    in    Ger- 
many, growth  of,  116 
Cattle  and  cattle  products,  German 
imports    from    Austria-Hungary, 
229 
Central  Industries  Association,  142 
Central  Europe  : 
Area,  201 

Citizen  rights  in,  258 
Community   of   life,    necessity 

of,  30  et  seq. 
Constitutional    problems,     251 

et  seq. 
Creeds  and  nationalities,  63  et 

seq.,  297 
Customs  union  for,  217  et  seq., 

240,  264 
Economic  Hfe,  iii  e^  seq.,  144, 

301 
Education  in,  257 
Food-supply,  independence  of, 

133 
Foreign  policy,  281 
Human    type — Mid-European, 

66 
International  economics,  place 
*         of    Central    Europe   in,    179 

et  seq. 
Jewish  question,  75 
Language  of,  108 
Military     obhgations     of     the 

Allied  States,  280 


Central  Europe  (continued) : 

Napoleonic  War,  efifects  upon, 

47 
Opposition — possible   opposi- 
tion to  scheme  of,  19 
Past  history,  36,  293 
Population  estimated,  203 
Rome,     separatist     movement 

from,  68  et  seq. 
Storage   of   supplies,    see   that 

Title 
Tariff  problems,  217 
Trade  unionism,  144,  303 
See  also  Germany  and  Aus- 
tria-Hungary 
Central  European  Economic  Asso- 
ciation, 144 
Charmatz,   Richard,    83,    100,  328, 

329 
China,  population  of,  203 
Christiansen,  C,  343 
Citizen  rights  in  Central  Europe,  258 
Cleinow,  G.,  339 
Coal  and  coal  products  : 

German    trade    with    Austria- 
Hungary,  229,  231,  232 
Statistics    for    various    States, 

317 

Cotvos,  Joseph,  Freiherr  von,  330 

Colonial  possessions  of  various 
States,  314 

Combines  as  a  means  towards  Mid- 
European  unity,  144 

Confederation  of  the  Rhine,  1806- 
13.  322 

Congresses,  international,  fostering 
Mid-European  unity,  144 

Constitutional  problems  in  Central 
Europe,  251  et  seq. 

Corn  storage  in  Central  Europe,  172 

Com  trade,    Hungarian,   220,   236, 

237 
German  imports,  229,  232 
"  Kanitz  "    proposal — State 
monopoly    of    foreign    com, 
163 
Cotton  goods,   German  trade  with 

Austria-Hungary,  229,  230 
Creeds    and    nationahties    in    Mid- 
Europe,  63  et  seq.,  297 
Criste,  Oskar,  333 

Crown  rights  in  Central  Europe,  259 
Csuday,  Eugen,  331 
Customs    and     commercial    treaty 
between    Austria    and    Hungary, 
1907,  270 


INDEX 


349 


Customs  Union,  169,  194,  213,  244 
Central  European,   194,  217  ei 

seq.,  240,  264 
Duties,  German  and  Austrian, 

compared,  235 
Small  States,  inclusion  of,  212, 

213 

Dahlmann,  41 

Dahlmann-Waitz,  336 

Defence — Germany  and  Austria's 
motive  for  war,  9 

Dehn,  Paul,  330 

Delbriick,  H.  von,  42,  156,  344 

Democracy  in  Germany  and  Aus- 
tria, 85,  86 

Deutsch,  Julius,  333 

"  Deutschland  iiber  Alles,"  11 

"  Dictatorship  of  the  Proletariat  " 
in  Germany's  war  purchase  policy, 

153 
Dislike  of  the  Germans,  causes  of, 

"3 
Dove,  A.,  332,  340 
Droysen,  41 
Duad  Alliance,  1879,  58 

See  also  Germany  and  Austria- 
Hungary. 

Economic  life  of  Central  Europe, 
111  et  seq.,  144,  301 

Economics  of  war,  joint  problems, 
146  et  seq.,  306 

Education  in  Central  Europe,  257 

"  Educational  "  tariff  duties,  247 

Educational  influences  in  Austria- 
Hungary,  128 

Educational  systems  compared,  301 

Egelhaaf,  G.,  336 

Elizabeth,  Empress  of  Austria,  93 

Eltzbacher,  205 

Emigration  from  Germany  and 
Austria-Hungary,  127,  291 

Engels,  D.,  121 

England,  see  Great  Britain 

Eulenburg,  Professor,  309 

Federations  of  employers  in  Ger- 
many, 116 

Ferdinand  I.  of  Austria,  71 

Fichte,  147 

Finances  in  Germany  and  Austria- 
Hungary,  condition  of,  174,  175 

Fischer,  Alfred,  335 

Fischhof,  Adolf,  330 

Flathe,  Th.,  340 


Food-supply  : 

Corn  trade,  Hungarian,  220,  236, 

237 
German  professors'  inquiry,  205 
Storage,  see  that  Title 

Foumier,  Auguste,  332 

France  : 

German  exports  to,  319 
Influence  of  in  Germany,  before 

1870-71,  55 
International  trade  of,  306 
Joint-stock  capital,  305 
Population  statistics,  203,  292 
Trade-union  membership,  303 

Frankfurt   Constitution,    1848,    51, 

53 

Franz  Joseph  I.  of  Austria,  38,  57, 

86 
Frederick  Barbarossa,  43,  44 
Frederick  II.  of  Prussia,  11,  37,  38, 

49,  54,  72.  85,  123,  192 
Frederick   William  IV.  of   Prussia, 

52,  60 
Free  Trade,  efiects  of,  148 
Friedjung,  H.,  42,  329,  338 

Gebhardt,  Br.,  336 
Gerlach,  Leopold  von,  344 
German  Commercial  Congress,  142 
German  Industrial  Union,  142 
German-Turkish    policy,     27,     191, 

198 
German  Work  Union,  140 
Germany : 

Agricultural  statistics,  303 
Alliance  with  England,  results 

of,  18,  61 
Business  competition  by,  120 
Business  spirit  in,  124  et  seq. 
Cartels  and  federations,  growth 

of,  116 
Characteristics  of  German  na- 
tion, 91,  119,  196 
Civil  War  of  1866,  4 
Colonies  of,  314 
Confederation  of  1815-48,  322 
Confederation  of  1850-66,  323 
Customs  Union,  169,  194,  213, 

244 
Democracy  in  1848,  85 
Dislike  of  the  German,  causes 

of,  113 
Economic      temperament      of 
North  and  Central  Germany, 
III 
Educational  statistics,  301 


350 


INDEX 


Germany  (continued) : 

Emperor's  constitutional  posi- 
tion, 324 
Exports  and  imports,  319 
Food-supply  and  unemploy- 
ment, adj  ustment  of ,  1 5  2  et  seq. 
Foreign  afifairs,  conduct  of,  282 
Imperial    Constitution,  history 

of,  269,  321 
"  Militarism  "    as   a   necessary 

discipline,  122 
National  idccils,  12,  13 
Nationalities,  methods  of  hand- 
ling, 78 
North  German  Confederation, 

1866-71,  323 
Population  statistics,  203,  292 
Prices  during  the  war,  309 
Revolution  ParUament,    1848- 

50,  332 
"  Self-contained    commercial 

State,"  147 
Taxation  after  the  war,  157 
Trade  unionism  in,  117,  303 
War   purchase  companies,   153 
See  also  Central  Europe 
Germany  and  Austria-Hungary  : 
Agricultural  output,  303 
Alternative  alliances  discussed, 

18 
Austria's  position  in  the  union, 

61 
Bismarck's  policy,   15,  22,  54, 

56 
Central  Europe,  see  that  Title 
Consumption  of  food  per  head, 

statistics,  305 
Customs  duties  compared,  235 
Defence  as  motive  of  war,  9 
Differences    between    the    two 

empires,   12  et  seq. 
Economic  union,  144 
Educational  statistics,  301 
Emigration  from,  127,  291 
Financial    conditions    in,    174, 

175 
Frontiers  after  the  war,  7 
Historical  retrospect,  35,  293 
Industrial  statistics,  301,  302 
Joint-stock  capital  in,  305 
MiUtary  affairs  of,  33,  278,  279 
PoUtical  unity,  reasons  for  and 

against,  ig  et  seq. 
Population  of,  203 
Postal  conditions  in,  304,  305 
Railway  conditions,  305 


Germany  and  Austria-Hungary  {con- 
tinued) : 
Religious  struggles  from  15 17, 

69 
Sentiment,  partnership  of,  30 
Sovereign's  position  compared, 

265,  267 
Statistical  data,  289  et  seq. 
Tariff  problems,  217,  318 
Trading  between,  229 
Wages  compared,  134 
Gervinus,  41 
Giegl,  320 
Giesebrecht,  336 
Gorgei,  Arthur,  334 
Goltz,  Th.  von  der,  343 
Gothein,  G.,  249,  341 
Grais,  Count  Hue  de,  338 
Great  Britain  : 

Administrative  system  of,  184 
Agricultural  production,  316 
Austria-Hungary,  effect  of  an 

EiUiance  with,  23 
Blockade  policy,  148  et  seq.,  307 
Business   competition   of   Ger- 
many, 120 
Coal  production,  317 
Colonies,    economic    value    of, 

205,  314 
Command  of  the  seas,  10,  147 
Germany,    effects    of    alliance 

with,  18,  61 
Joint-stock  capital  in,  305 
Peace  treaty — possible  charac- 
ter of,  190 
Population  statistics,  203,  292 
World-State — Great  Britain  as, 
182 
"  Greater  Germany  "  ideals,  15,  17, 

52,  71,  223 
Griinberg,  K.,  333 
Gumplowicz,  Ludwig,  330 
Guttentag,  320 

Hausser,  41,  336 

Hamburg  as  the  overseas  trading 

centre  of  Mid-Europe,  264 
Havenstein,  156 
Haym,  R.,  345 
Hegel,  71,  123 
Heinrich  I.,  III.  and  IV,  of  Germany, 

43 
Helfert,  J.  A.  von,  332 
Helfferich,  State  Secretary,  309,  343 
Helmholtz,  120 
Helmolt,  42 


INDEX 


351 


Herkner,  Heinrich,  344 
Hevesi,  Ludwig,  333 
Hlckmann,  A.  L.,  292,  330 
Hindenburg.  156 
Hintze,  O.,  339 
Hirsch-Duncker  Union,  142 
Robbing,  Reimar,  338,  340 
Hohenlohe-Schillingsfiirst,      Prince, 

338 
Howarth,  Michael,  331 
Huber,  Alfons,  330 
Hiibener,  343 
Husgen,  Ed.,  345 
Hungarian  Revolution,  1848-49,  86, 

91 
Hungary : 

Characteristics  of  the  people,  92 
Economic  relations  with  Aus- 
tria, statistics,  310,  311 
Legal  independence  and  Terri- 
torial integrity,  326 
Military  affairs  of,  280 
Nationalities  in,  299 
Roumanians,  position  of,  98 
Hus,  Johann,  88 

Imperial  German  Constitution,  his- 
tory of,  321 
"  Industrial  maintenance  "  duties, 

247 
Industrial  statistics,  301,  302 
International  trade  and  exchange 

before  the  war,  146,  306 
International  treaties  after  the  war, 

261 
Internationalism,     beginning     and 

growth  of,  186 
Italy  : 

Agricultural  output,  304 
International  trade  of,  306 
Population  statistics,  292 
Position  in  the  war,  2 
Trade  -  union    membership    in, 
303 

Jackh,  Dr.  Ernst,  83,  309 
Jastrow,  H.,  344 
Jekelfalussy,  Joseph  von,  331 
Jeutsch,  Karl,  344 
Jews  in  Central  Europe,  position  of, 
75  et  seq.,  297 
Anti-Semites  in  Germany,  144 
Joseph  II,,  49 

Kahmel,  O.,  340 
Kaindel,  R.  F.,  93,  355 


"  Kanitz   proposal  " — State   mono- 
poly of  foreign  com,  163 
Kant,  Immanuel,  71,  123 
Karl  the  Great,  43,  44 
Karl  V.   of  Germany,   43,   44,   46, 

325 
Kaufmann,  9,  336 
Kerchnawe,  Hugo,  334 
Kirdorf,  123 

Klein-Hattingen,  Oskar,  341,  345 
Kohl,  H.,  337 
Kolmer,  Gustav,  332 
Kosch,  Wilhelm,  335 
Koser,  R.,  344 
Kossuth,  Ludwig,  334 
Kralik,  Richard,  331 
Krones,  Franz  von,  331,  334 
Krisch,  P.,  343 
Kupsanko,  Gregor,  335 


Laband,  P.,  338 
Labour : 

Austria-Hungary,     labour    re- 
forms, 129 

Intensification — opposition   to, 

137 
Socialism,  see  that  Title 
Trade  -  union    membership    in 
various  countries,  303 
Lamprecht,  Karl,  42,  336,  338 
Landmann,  Karl  von,  334 
Lang.  Ludwig,  333 
Language : 

Central  Europe,  language  ques- 
tion, 257 
Hungarian    National    Law    of 

1868,  93 
Magyar,  use  of,  94  et  seq. 
Lassalle,  Ferdinand,  131 
Legien,  123 
Lehmann,  M.,  344 
Lenz,  M.,  345 
"  Lesser  Germany  "  ideals,  15,  17 

19.  43.  52.  71 
Levy,  Hermann,  309 
Levy,  M.,  343 
Lexis,  W.  von,  341 
Liebknecht,  253 
List,  Friedrich,  223 
Lobell,  A.  von,  342 
Loenig,  C,  338 
Loesche,  Georg,  333 
Losch,  Finanzrat,  223,  230,  320 
Lotz,  W.,  342 
Luther,  Maortin,  70 


352 


INDEX 


Machinery,    German    trade    with 

Austria-Hungary,  229,  232 
Mackensen,  General,  156 
Magyar  language,  94  et  seq. 
Magyar  revolt,  1866,  91 
Magyars  and  the  Russian  danger,  20 
Manes,  A.,  344 
Marcks,  E.,  345 
Marczaii,  H.,  331 
Maria  Theresa,  25,  37,  38,  49,  72, 

84 
Mcirx,  Karl,  121,  153 
Maurenbrecher,  W.,  337 
Mayer,  Franz  Martin,  331 
Maximilian  I.  of  Germany,  43 
Mehring,  F.,  341 
Meineike,  Friedrich,  337,  344 
Meisel,  Hofrat,  176 
Menger,  Max,  335 
Mesopotamia,  202 
Meszl6ny,  A.,  343 
Metternich,  Prince,  84,  85,  337 
Mid-Europe,  see  Central  Europe 
"  Militariam  "    in    Germany — a 

necessary  discipline,  122 
Mihtary  forces  in  Central  Europe, 

289 
Military  legislation  in  Germany  and 

Austria-Hungary,  278 
Mollat.  G.,  337 
Moltke,  II 
Mommsen,  40 

Nagl,  J.  W.,  333 

Napoleon,  13,  47,  49 

National  spirit  in  Hungary,  88,  89 

Nationalities  and  creeds  in  Central 

Europe,  63  et  seq.,  297 
Naumann,  Friedrich,  341,  342 
Naval  War,  Anglo-German,  9,  10 
Navy,  Central  European,  statistics 

of,  290 
Netherlands  : 

Agricultural  statistics,  303 
Colonies  of,  314 
International  trade,  306 
Joint-stock  companies,  capital 

in.  305 
Population  statistics,  292,  315 
Trade-union  membership,  303 
Nicholas  I.  of  Russia,  47,  50 
North  German  Confederation,  1866, 
71.  323 

OCKEL,  H.,  340 

Oertzen,  Dr.,  345 


Oncken,  H.,  344,  345 
Oppel,  A.,  343 
Oppenheimer,  Franz,  309 
Organising  abiUty  of  the  Germans, 

"5 
Otto  I.  of  Germany,  43 

Pan-Germanism,  17,  91,  144 

Parisius,  L.,  344 

Parliamentary    system    in    Central 

Europe,  273  et  seq. 
Partnership    among    the    Powers, 

results  of,  1  et  seq. 
Peace  of  Westphalia,  1648,  69,  321 
Perthes,  320 

Pfannkuche,  August,  341 
Phihppovich,    Professor    von,    223, 

224,  320 
Pierson,  W.,  339 
Pistov,  305,  320 

"  Planet  and  satellite  "  States,  180 
Poeschel,  C.  E.,  339 
Poland : 

Conditions  of  settlement  after 

the  war,  107 
German  policy  in,  79 
PoUtical  administration  of  Central 

Europe,  258,  259 
Popovici,  Aurel  C,  100,  330 
Portugal,  population  statistics,  292 
Poschinger,  Heinrich  von,  337 
Poverty  in  Austria-Hungary,    126, 

127 
Prague  as  the  treaty  centre  of  Mid- 
Europe,  264 
"  Preservative  "  duties,  247 
Preusz,  Hugo,  341 
Prices  : 

German,  during  the  war,  309 
Rise  of,  after  war,  165 
Producers'  socialism,  158 
Protestants  in  a  minority  in  Central 

Europe,  72 
PubUc  services  in  Austria-Hungary, 
reforms  for,  130 

Racial  problems  in  Hungary,   91 

et  seq. 
Radetzky,  Count,  334 
Ranke,  L.  von,  41,  334,  336 
Rauchberg,  Heinrich,  330,  335 
Rauchhaupt,  F.  W.,  340 
Raumer,  41,  336 
Reformation,  69 
Reich,  J.  M.,  345^ 
Religion  in  Central  Europe,Jj256 


INDEX 


353 


Reventlow,  Count  von,  342 
Revolution    Parliament,     1848-50, 

322 
Rhine  Confederation,   1806-13,  56, 

322 
Richter,  Eugen.  340,  345 
Risser.  J..  343 
Rogge,  Walter,  332 
Rohrbach,  Paul,  11,  342 
Rome  and  the  Separatist  movement 

in  Central  Europe,  68  et  seq. 
Roumania  : 

Agricultural  statistics,  304 
Educational  system,  301 
Hungary,  position  of  Rouma- 
nians in,  98 
Population  statistics,  292 
Textile  market,  237 
Rudolf  von  Hapsburg,  43 
Russia  : 

Agricultural  statistics,  304 
Central  Powers  and  the  Russian 

danger,  9,  10 
Coal-supply  of,  317 
Economic   power,    actual    and 

potential,  210 
Educational  system,  301 
German  alUance  with,  18 
German  exports  to,  319 
International  trade  of,  307 
Joint-stock  companies,  Russian 

capital  in,  305 
Napoleonic  war,  Russia's  r61e, 

47  et  seq. 
Peace  treaty — possible  charac- 
ter of,  191 
Population  statistics,  20 
World-State,    Russia   as,    182, 

316 
Russo-Turkish  War,  1876,  58 

Salomox,  p.,  341 
Samassa,  Paul,  330 
"  Satellite  "  States,  180 
Savigny,  120 
Schafer,  D.,  42,  336 
Schaffle,  A.  E.  F.,  224,  334 
Scharnhorst,  123 
Schlesinger,  Ludwig,  335 
Schlosser,  336 
Schiitz,  Friedrich,  332 
Schulthess,  336 
Schwarzenburg,  53 
Schwemer,  R.,  336 
Sembratowycz,  R.,  335 
Sepp.  J.  R..  344 


Seton-Watson,  R.  W.,  335 
Seven  Years  War,  4,  23,  24 
Siemen,  123 

Size  of  States,  classification,  312 
Skene,  Alfred  von,  335 
Small  States  : 

Insignificance  of,  4 
Trench-making  policy  in  regard 
to,  8 
Socialism  : 

Austria,  social  democracy  in,  104 
Germany,  social  democracy  in, 

117 
International,  development  of, 

186 
Progress  of,  158 
State  socialism,  see  that  Title 
Sombart,  Werner,  112,  341,  342 
Sosnowsky,  Theodor  von,  329 
Southern  Germans  union  with  the 
North — example  for  Mid-Europe. 
142 
Spain,  population  statistics  of,  292 
Spiethoff,  Professor,  176 
Springer,  Anton,  100,  329 
Springer,  Rudolf,  329 
Starvation  of  Germany,  see  Storage 
State  Socialism  : 

Definition  of,  158 

Syndicates  with  guarantees  for 

workers,  160,  167,  176 
War    policy    of    Germany    re- 
garded as,  153,  155 
States,    classification   according    to 

size,  312 
Statistical  data,  288  et  seq. 
Stein,  Baron  von,  48 
Stein,  Ph.,  337 
Steinbach,  Gustav,  333 
StiUich,  Oskar,  341 
Stoerk,  F.,  340 

Storage  of  food-supplies,  162  et  seq., 
213 
Central  Europe,  149,  150,  171, 

172 
"  Kanitz  "  proposal,  163 
Syndicate  treaties,  244 
Strakosch-Grassman,  Gustav,  332 
Sybel,  Heinrich  von,  334,  337 
Syndicate    treaties    for    storage    of 

food-stuffs,  244 
Syndicates,  State,  with  workmen's 

guarantees,  160,  167,  176 
Sweden  : 

Population  statistics,  292 
Trade-union  membership,  303 


354 


INDEX 


Switzerland  : 

Agricultural  statistics,  303 
Joint-stock  companies,  capital 

in,  305 
Trade-union  membership,  303 


Tariff  problems  in  Central  Europe, 

217  e^  seq.,  318 
Taxation,  forms  of,  after  the  war, 

157.  176 
Teutsch,  G.  D.,  335 
Textiles,  Balkan  markets,  question 

of,  237 
"  Thinking  in  Continents,"  5 
Thirty  Years  War,  4,  13 
Timber,     German     imports     from 

Austria-Hungary,  229 
Tisza,  Count,  97 
Trade  : 

Customs  union,  see  that  Title 
Economic    exchange    through 

overseas  trade,  147 
Germany's    trade    during    the 

war,  154 
Tariff     problems     in     Central 
Europe,  217,  318 
Trade  unionism  : 
Germany,  117 

Various  countries,  comparative 
table,  303 
Treaties  : 

Customs  and  commercial  treaty 
between   Austria   and   Hun- 
gary, 1907,  270 
International,    after    the    war, 

261 
State  treaties  in  Central  Europe, 
261,  265 
Treitschke,    Heinrich  von,   41,    42, 

71.  336 

Trench-making  policy,  8,  278 

Tschierschky,  342 

Turk,  Karl,  335 

Turkey  : 

Balkan  and  Turkish  interests 

in  Austria-Hungary,  198 
Central  Powers'  alliance  with,  2 
Economic  problem  of,  248 
German   reorganisation,    effect 

I  of,  27,  191,  198 


United  States  of  America  : 

Administrative  system,  184 
Economic   power,    actual   and 

potential,  208 
Population  statistics,  203,  292 
World-State,  182 

"  United  States  of  the  World,"  179 

Veit,  Valentin,  345 
Veltz6,  Alois,  334 

Vienna  as  the  legal  centre  of  Mid- 
Europe,  264 
Vienna  Congress,  322 

Waentig,  Heinrich,  333 

Wages  in  Germany  and  Austria- 
Hungary,  134 

War  economics,  joint  problems  in, 
146  et  seq. 

War  purchase  companies  in  Ger- 
many, 183 

War  storage  system,  see  Storage 

Weber,  Max,  138 

Waller,  K.,  340 

Wenck,  Martin,  340 

Wendrinsky,  Johann,  332 

Wertheimer,  Eduard  von,  329,  332 

Wheat,  increased  production  in 
Hungary,  132 

Wieser,  Leopold  von,  343 

Wilhelm  I.,  38 

Wilhelm  II.,  60,  286 

Wippermann,  336 

Wood — German  imports  from  Aus- 
tria-Hungary, 229,  231 

Woollen  goods,  German  trade  with 
Austria,  229 

Wolf,  Adam,  331 

Wolf,  Julius,  240,  289 

Wolfsgrube,  C,  334 

Women  in  war  occupations,  posi- 
tion after  the  war,  165 

Workers'  socialism,  definition  of,  158 

"  World-States,"  179,  182,  316 

Wurttemberg,  military  affairs  of,279 

Zeidler,  J.,  333 
Zenker,  Ernst  Viktor,  332 
Zwiedineck-Siidenhorst,     H.     von, 

331.  332 
Zwingli,  70 


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